11 Things You Should Know About Homeowners Insurance
Our friends at LearnVest offer sound financial tips and advice for every aspect of life. Here’s a guide to homeowners insurance — everything from what it covers to how to save by bundling and when to file a claim.
Insurance requires you to think about bad occurrences: medical problems, car accidents, emergency home repairs. But while it may sound pessimistic to dwell on what could happen (carpe diem, anyone?), it’s important to protect yourself from some of life’s biggest surprises.
When it comes to protecting your home, it’s not just about safeguarding against structural damage or theft — it’s just as much about feeling secure in where you live. If disaster strikes, your focus should be on reclaiming your sense of stability. The last thing you should worry about is money.
We spoke to LearnVest Planning Services certified financial planner™ Ellen Derrick — and some real homeowners — about the top 11 things you should know about homeowners insurance.
No. 1: What it covers
A typical policy will pay for damage to your property and your possessions in the event of certain storms, fire, theft or vandalism. Like renters insurance, it also provides liability coverage if someone gets hurt on your property and decides to sue. Homeowners insurance also covers shelter costs, so you don’t have to face crazy hotel bills if you’re temporarily displaced from your house.
Homeowners insurance can protect belongings outside the home, too. If something is stolen from your car, auto insurance won’t cover it — but your homeowners policy likely will. “Most policies will cover your belongings when they are traveling with you,” Derrick said. “If you have a $1,200 laptop and it gets lost by the airline, call your insurance agent — right after you file the claim with the airline, of course.”
No. 2: What it doesn’t cover
A standard policy has exclusions including earth movements (landslides, earthquakes, sinkholes), power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding. Windstorms are typically covered, including tornadoes, although insurance companies exclude tornadoes or hurricanes in some high-risk areas.
Water damage is tricky. As a rule of thumb, water from above (rainwater or a burst pipe in an upstairs apartment) is usually covered, but water from below (backed-up sewers or ground flooding) generally isn’t. If your region is prone to floods and earthquakes, you should consider supplemental coverage.
No. 3: Why you should shop around
Before committing to a policy, take the time to research an agent whom you trust — preferably one with good reviews online or via a personal recommendation. It’s certainly something that homeowner Ramzy Ayyad, who struggled to receive benefits following a house fire in November 2008, recommends that prospective homeowners do. “I had to deal with a rude adjuster,” he said. After complaining assertively to the adjuster’s boss, Ayyad finally received a check for the damages — but the process was exhausting.
By contrast, homeowner Terri Corcoran has nothing but glowing reviews for her adjuster. After a snowstorm caused a major leak in Corcoran’s laundry room, an insurance agent came to her home to assess the damage and promptly determined that the entire room needed to be redone. “They wrote me a check on the spot for what it should cost,” Corcoran said. “I was really impressed by how the company responded!”
Bottom line? Don’t just shop for a policy. Make sure you also select the best agent.
Read 8 more homeowner’s insurance tips here.
More from LearnVest:
- What I Wish I Knew Then: 3 Real-Life Tales About Life Insurance
- 7 Times Renter’s Insurance Will Seriously Save You
- How Much Insurance Is Enough?
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.