Below are some of the common points of misunderstanding homeowners have regarding what isn’t covered in their policy.
Your Loss Must Be Sudden and Accidental
A homeowner’s insurance policy is for sudden and accidental losses, events that people cannot prevent. If your loss is something that’s developed slowly over time it is not considered sudden and accidental. For example, a pipe or appliance leaking over a long period of time would NOT be considered sudden and accidental while a burst pipe or the sudden failure of a water heater is.
Wear & Tear
Normal expected wear and tear is inevitable and not covered under your policy. Insurance is designed to protect you from unforeseen losses. If you have a roof that is 25 years old and is already at the end of its useful life because of its age, it is not covered under your homeowner’s insurance policy. It’s the same concept as car insurance. If you owned an automobile that had old tires and they were going bald, you would need to purchase new ones. It wouldn’t be covered under your car insurance.
If you notice something is wrong and don’t take corrective action to prevent further damage, the loss is not covered by your homeowners insurance policy. For example, if you notice a small water stain developing on your ceiling or wall, you can stop the area of the leak with calk, a waterproof filler and sealant. If you decided to do nothing and the water damage continues, it would not be covered.
Sub Limits on Personal Property
Most homeowner insurance companies have sub limits on personal property depending on the peril. It’s important to understand what those limits are. That way, if you have any personal property which exceeds the limit, you can decide how you want to manage that risk. It might be in your best interest to purchase a personal articles floater policy for that specific item. For example, if you have an expensive diamond ring that is stolen from your home, most insurance companies would limit their reimbursement to a couple thousand dollars, which might not be enough.
Removal of Trees Felled by Wind
If a tree falls in your yard as a result of a windstorm but does not hit the house or another covered structure, your insurance policy will not pay to remove the tree. However, if your tree falls and damages even a portion of a covered structure, there is limited coverage to remove the tree from the property.
If you have a standard homeowner’s policy, often referred to as a “HO-3”, it is intended for owner occupied homes. If you haven’t moved in yet because you’re still living in a home you’re trying to sell or if you just own the property for investment purposes, you will need to change the policy type. Vacant homes are higher risks. Not only are they targets for thieves and vandals, but if there is a small loss that occurs, there is no one in the house to prevent it from becoming a large loss. If you file a claim, it will not be covered if your home is vacant and not carrying the correct type of policy. Further, if you decide to rent your house, this also requires a different policy type. HO-3 policies are only for owner occupied homes and not intended for vacant homes or rental properties.
Surface Water Runoff
After heavy rains, some lawns collect or pool water in one location. If too much water accumulates in an area around your home it may seep into the foundation and cause damage to your home. The damage would not be covered under your homeowner’s policy. So, if you notice your lawn has a tendency to pool in one location, it would be wise to contact a landscaping company for possible solutions.
Failure to Take Action After a Loss
If you experience a loss and fail to take reasonable actions to prevent further damage, your loss might not be covered. For example, if a tree falling creates a hole in your roof, it would be reasonable to expect you cover the hole with a tarp until it is repaired. If you left the damaged roof exposed it would create a much larger interior loss and your failure to prevent the additional damage may not be covered.
Failure to Report a Claim in a Timely Manner
It is important to submit claims in a timely manner. The more time that passes, the more difficult it is for the adjuster to determine the cause of the loss, which is essential in determining if the loss is covered under the policy.
If you provide inaccurate information on your application for insurance, your policy may be voided as soon as the company finds out – which is often while researching a claim. If the misrepresentation is material to the acceptance of the policy, the policy may be voided and any claims denied. This includes not admitting to prior losses, providing the incorrect occupancy type, and not disclosing existing damage to your home. These are just a few examples of some common areas. It might seem harmless not to be forthright about this information to get a better rate up front, but it’s definitely not worth it in the long run. Not only will your policy be voided and any claims be denied, it may impact your ability to find coverage with another insurance company.
Not letting us see the damage
While it is important that you take immediate steps to protect your property from further damage once you are aware of a loss, if you discard the part that caused the damage, gut the area, remove the damage and make repairs before we are able to inspect, this may prevent us from determining the cause and extent of your loss and result in a denial of your loss.