Don’t overlook details about homeowners insurance policies

As they say, the devil is in the details and this is true about homeowners insurance policies. Learning after a calamity that a policy does not cover what a homeowner thought it covered is, indeed, devilishly bad.

How can that be? How can responsible homeowners overlook details about homeowners insurance policies? It happens because of misunderstanding about what exactly is included in coverage. The prime example is the person who mistakenly assumes his coverage includes flood damage. Policies don’t cover flooding, as a rule, and that is a big oversight for a homeowner. The remedy is to buy separate flood insurance so that when the water rises, the cost to a homeowner does not.

But there are subtler details about homeowners insurance policies. If a policy guarantees to rebuild a destroyed restructure as it was before the destruction occurred, that might not be good enough if in the meantime zoning codes have changed. This code change could require a new design for a rebuilt house, or more fire resistant materials, which would drive up the cost beyond a claim settlement amount. To avoid this, a policy can be purchased with code upgrade coverage.

When a house and its contents are damaged severely and the repair and replacement cost is less than a coverage limit, a homeowner’s assumption is that his loss will be fully covered. Maybe not. Many policies have sub-limits for payments on particularly expensive items, such as artwork or jewelry. The individual worth of an item might not be reimbursed because the sub-limit coverage on the item is less than the item’s full value. Bummer! The way around this disappointment is to buy a policy that lets valuable items be listed and insured individually and fully.

These and other details are not hidden or de-emphasized by a reputable insurance provider, who never assumes that a homeowner knows the ins and outs of insurance. In the event the details about homeowners insurance policies do seem to be glossed over, it is a warning to an insurance buyer that he should shop around some more.  If an insurer is not forthcoming when he sells a policy, settlement money is not apt to be forthcoming from his office after a disaster.

This is one of the most important details about homeowners insurance policies: Buy from a scrupulous insurer.

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