Many people buy insurance homeowners’ because they are required by the bank if they can get a mortgage, “explains Steven Spiro, a principal with The Excelsior Group, an insurance office in Valley Stream, NY” They just follow orders and do what the bank says they “they tend to forget about it -. until they file a claim and find that something they thought would be covered, in fact.
Test your knowledge
Here’s a quick way to see how much you know about common gaps in your homeowners coverage:
The bank did not tell me I had flood insurance, so I do not need. Right? Error. Like thousands of people in the aftermath of Hurricane Sandy, Tropical Storm Irene or even a particular rainstorm discovered target their area, flooding can happen anytime, anywhere. “Ninety percent of all natural disasters or other form of floods,” said Jeanne Salvatore, spokesperson for the Insurance Information Institute (III), an industry-supported nonprofit organization. But only 13% of Americans surveyed had flood protection by the III. Even if you do not live in a high-risk area, according to the III, more than 20% of all flood insurance claims are filed in flood areas with low to moderate. “Flood insurance coverage is the one everyone should have,” states Salvatore.
Standard homeowners and renters’ insurance policies do not cover damage from floods, which the insurance is strictly defined as the rise and overflow of a body of water on normally dry land. However, flood coverage is available as a separate policy from the National Flood Insurance Program (www.floodsmart.gov). Note that a 30-day waiting period is required to cover power, so do not wait for an ominous again to buy protection.
If the storm sewer backup in my basement, I covered? You may think that water is overflowing from your toilet, sink or shower drains is a flood – after all, it looks like a flood – and that flood insurance would cover. It will not. Nor, in most cases, your regular home insurance, though more than two-thirds of those surveyed by the III believe that damage due to sewer backup / sump pump failure is covered by the policy of their owners. You may want to ask – and pay extra for – this extra protection (called an endorsement). Otherwise, the cost of the repairs will come from your own pocket.
If new building codes require upgrading undamaged parts of my house, my insurance will cost? Although nearly two-thirds of Americans polled by MetLife said “yes,” the answer is “no.” In most cases, do not have to pay the policy for upgrades in undamaged areas of housing, even if these improvements are imposed by stricter building codes. However, most insurance companies offer additional “regulation or law” coverage – at an additional cost.
If my house was destroyed in a fire, my policy will cover the cost of reconstruction? Perhaps – although probably not the full cost, to the surprise of almost three quarters of respondents MetLife. Almost all insurance companies cap how much they will pay if you are a total loss, unless you purchase optional coverage. And because the depreciation is taken into account when calculating the value of the personal property, homeowners may find that their insurance checks is much smaller than they want. Moreover, most policies include property losses for a deductible as well.
On a positive note: the policy cover Many homeowners “additional living expenses” or “loss of use” fees if you can not live in your home due to a disaster covered by insurance. If ALE coverage is included in your policy, your insurer will pay for the “actual, reasonable and necessary increase” in your living expenses while your home is repaired or rebuilt.
Another bit – or “byte” – good news: Most policies cover the cost of replacing electronically downloaded and stored data and entertainment such as music and ring tones that expensive to replace without could have easy access to free re-downloads . At least, you can listen to music to cheer you up.