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When Your Homeowners Insurance Isn't Enough

By Compuquotes Team on March 27th, 2008

Homeowners Insurance

You pay for homeowners insurance every month, and you assume that it will be there to cover unexpected losses. You've been careful to update your policy to cover the replacement cost of your home so that you won't be surprised in the event of a loss. But do you really have all the insurance that you need to cover you in the event of a damaging event? You may be surprised at the things that your homeowners' insurance doesn't cover.

Basic homeowners insurance covers you against losses arising from many unfortunate accidents and incidents. In most cases - there are exceptions in different regions for specific coverage - your basic homeowner policy will cover you for damages arising from:

  • fire and lightning
  • smoke damage
  • explosion
  • vehicles
  • aircraft
  • vandalism
  • riot or civil commotion
  • windstorm or hail
  • theft

In many areas of the country, though, you may need extra or specific coverage for insurance against specific types of weather related damage. In the northern states, for instance, your basic homeowners policy may not cover damage to your home from the weight of snow. In many states, especially coastal ones, you'll need additional flood insurance. In the Midwest, you may not be covered for damage from tornados. And believe it or not, many major insurance underwriters are now specifically excluding damages that arise from terrorist attacks.

In addition, you may find that your standard homeowners insurance doesn't pay enough to replace many of your most valuable possessions. In many cases, the coverage for electrical and computer equipment is limited unless you specifically purchase a rider to insure them against damage. Your home insurance may pay enough to replace the wall-to-wall carpet if a water pipe breaks and floods your living room - but if that carpet is an expensive Oriental rug, you may be out of luck. The same holds true for valuable collectibles, jewelry, specialized equipment - even inventory for business that you keep in your home.

The answer is to read through your insurance policy carefully to find out exactly what the limits of its coverage are, and then talk to your insurance agent about supplemental policies and riders to cover you against losses that aren't covered in your basic policy. This is especially important if you work out of your home or maintain a home office. The equipment that you use for your business may not be covered at all under a homeowner policy. You may even find that you are not covered for liability if someone is at your home for business purposes when they were injured. While you're at it, look over your automobile insurance to find out if there are limitations on your auto insurance coverage if you are engaged in something work related when an accident happens.

One other type of homeowners insurance that few people think about would help you pay for updates to your property required by changes in the law. When your city makes code or zoning changes, it can end up costing you money. New code specifications may require adding safety equipment to your property, reinforcing foundations or changing your windows. Zoning changes may make it impossible for you to rebuild your home after a fire or other damaging event. In both cases, an insurance rider that would cover the costs associated with changes in local ordinances could help you with the expense of updating your home to the new codes.

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