Don't Let What Your Homeowners Insurance Covers Surprise You
Is it finally Spring in Louisville? As you look around home and yard, you may be thinking of some repairs you need to make from the winter and some improvements you want to make for the spring. This is a good time to look over your home insurance policies and make sure that they are up to date. In case of loss, you don't want to be unpleasantly surprised about what it doesn't cover.
Would Your Home Insurance Cover This?
A recent amusing article in MSN Money points several unusual things that home insurance policies did end up covering. The homeowners noted in the examples below may not have thought to ask about coverage in advance to the incident mentioned, but they raise legitimate questions about your policy. What exactly does your home insurance cover? Here are some surprise items that some homeowners found were covered by their policy.
- "The dog ate my ring." When a homeowner claimed the dog ate a valuable piece of jewelry, the insurance company wanted to buy the dog to salvage the jewelry. The insurer ended up paying the claim after a call from the insured's lawyer. The homeowner got to keep his dog, which would not be covered under home insurance if he were lost or stolen.
- "My yard burned up and I couldn't have a wedding there." Homeowners who planned the backyard wedding for their daughter had to move to a hotel when fire destroyed the yard. A Massachusetts company paid the cost of moving the celebration to a hotel. Even if you are thinking about having festivities in your yard, this is a good reminder to make sure you have additional living expense if your home is damaged and you have to live elsewhere.
- "Cut a check to my decorator." Philadelphia homeowners whose home was decorated by a professional got reimbursement after a disaster so they could have a decorator redecorate after the repairs. Even if you're your own decorator, this example reminds you to think of any special of expenses you might have in case of a loss. Make sure to ask your insurance agent whether you have coverage.
- "It's not the 90s, but cover my Beanie Babies." A homeowner successfully got payment for $30,000 worth of Beanie Babies, once a popular collectible. Modern insurance policies would not pay such a large amount for a collection that was not insured by a special rider, so if you have a big investment in figurines or any other collectible, make sure they are protected.
- "Take my toxic house, please." A homeowner who stored large quantities of pesticide in his basement had a fire that dissolved the chemicals into the concrete. The house was toxic to humans and to swarms of bugs. The client got a settlement that allowed him to demolish and rebuild the house. Caution: don't try this at home! Your policy might prohibit the storage of dangerous chemicals in your home, especially if you are using them for a business, as this homeowner was.
Covered Or Excluded?
You can read the rest of the article here if you want to see the other unusual things that insurance companies reimburse for homeowners, but it's important to realize that your insurance policy might not cover unusual items like this. Insurance typically covers what is named and does not cover what is excluded. Policies referenced in the article is obviously lacked exclusions that would let the insurance company off the hook, but modern policies contain more and more exclusions. Insurance companies need to limit their liability somehow in order to pay more reasonable claims.
Do you have enough coverage? Have you made an addition recently that needs to be covered, or updated the kitchen or bathroom? Have you received expensive jewelry? In the case of a claim, your policy might not pay for a rec room or extra bathroom or 5 carat diamond that wasn't listed. Make sure to review your policy and then chat with your insurance agent about any changes in coverage you need to making your policy. Reporting the change, might cause you premiums to rise a bit, but you better off playing $50 a year rather than to lose thousands if your policy limits were not high enough or you failed to report changes in your home or in your possessions.
Prove You Owned It
In addition to talking to agent to make sure your policy is current, make sure to update your inventory of household possessions. Many insurance companies have smart phone apps where you can upload a picture of an item or the receipt for it so that the information is available in case of a loss. Even if your insurance company doesn't have such an app, there are many home inventory apps for both computers and your iPhone and Android devices make recording your possessions easy.
Happy spring! Flowers are budding and the real estate market is waking up! If you are thinking of buying or selling a home this spring, contact me, Jessica Gaines Jarboe of Louisville Gaines Real Estate.