Finding out and understanding some features related to home insurance policies, such as deductibles and rates, is comparatively easy. But some sections are hidden behind the exclusions and declarations of home insurance policies. If these are not explored by you, they may cause you stress if you ever need to file a claim. Even if you’re faithfully paying all your premiums, these unexpected situations can occur. These holes hidden behind the front sections of your home insurance can leave you to carry the expenses yourself. Some such hidden holes are the following.
Upgrades that are Required
Even if upgrades are required in those parts of the home that are not damaged, according to the new law, such upgrade costs are not usually covered by home insurance policies. Coverage for additional “ordinance or law” can be taken out by concerned homeowners. At the time of purchasing the house, it is likely that you will make certain that the house meets the code, and if any upgrade is required, negotiations should be carried out by you for that within the process of price offering.
Pipes that Burst
Damage caused by pipes that burst is usually covered by insurance companies, but typically not at those times when it occurs due to the negligence of the homeowner. The meaning of “negligence” in this case can be not keeping enough heat on during winter or not draining the pipes when needed. Certainly, you’re likely to be careful about such precautions for saving your house from damage, but your forgetfulness or negligence can make you pay for this from your own pocket.
There are certain limitations to most home insurances regarding complete rebuilding, e.g. the cost of rebuilding due to the home being destroyed by fire may not be covered. It is mistakenly thought by some homeowners that insurance companies will pay for rebuilding. Thus at the time of your policy setting, checking the limitations is necessary, so that the coverage amount is calculated accordingly.
Wages that are Lost
When you face any sort of damage to your home, any necessary steps taken by you will certainly be a lengthy process and that can affect your work time. But the wages that are lost under these circumstances are not covered by insurance. Particularly for those who work on an hourly basis, this loss can be at a high rate.
Specific contractors are often recommended by the insurance companies for handling repairs, but asking for a bids competition can be a better approach for a homeowner. The procedure for handling the bids competition should be queried by the homeowner and what should also be considered is whether or not the best offer is a sensible one.
Emotional Support after Traumatic Events
When a traumatic event is experienced, like a flood or fire, through which their homes are completely ruined, often emotional support is needed by homeowners in addition to financial support. Such grief is in some cases compounded by the loss of their pets. This type of mental support cannot be provided by insurance companies, rather, it can be provided by online forums or support groups.
Events that May Occur Simultaneously
If there is an occurrence of two different events at the same time, and one of the two, such as an earthquake, is not taken care of by the insurance, then the damage done by both events may not be covered by the insurance policy. The technical reason behind this is the “anti-concurrent causation”. This means that an occurrence of, for example, both earthquake and flooding at the same time may leave the homeowner bankrupt. This phrase is not recognized by most homeowners unless they are faced with it.
According to the American Consumer Federation, there is a constant increase in the deductibles, and this means that more expenses must be carried by the homeowners before their insurance coverage takes effect. You may have to initially bear the expense for the damage that your policy ensures it will cover.
An extra policy is needed to be taken out by the homeowner looking for earthquake coverage by an insurance company. But this type of necessity is based on particular areas that are prone to earthquakes. Those areas may have to face the wrath of earthquakes several times, which is unexpected, and this will certainly cause thousands of dollars worth of damage.
Flooding is rarely covered by private insurance, and thus homeowners for whom this protection is needed will have to approach the National Flood Insurance Program of the federal government, based on FEMA. It is mistakenly believed by some homeowners that flood damage is covered by insurance policies, which is not the case. Homeowners who have residence near water or are more exposed to hurricanes or storms are at greatest risk in this case.
Finally, it can be said that the protection you’re looking for from an insurance company may sometimes not meet your expectations. Thus, you should read and fully understand the clauses of your policy so that you do not have to face any cruel surprises from your home insurance company.