What Optional or Extended Coverage Can I Purchase as Part of a Homeowners Policy?Posted on Jul 24, 2016
While the average homeowner’s insurance policy does hit most of the basics to spare your family from financial devastation when certain covered events take place, they don’t eliminate all risks. In fact, some of them leave a few more coverage weaknesses than the average homeowner is comfortable with. In these instances there is almost always an optional policy or extended coverage available to offer additional protection for your home and your possessions. These are a few of the highlights you might want to consider.
In the event that your sewer or drains back up into your home or basement, a water backup policy will pay a specified amount to cover the costs of repairs and cleaning the mess the incident leaves behind. It’s not a pleasant thought – it’s even more unpleasant to discover you’re not covered for that after the incident occurs.
Replacement Cost Coverage
The problem with most homeowners’ policies that cover the contents or personal possessions in your home is that they deduct depreciation from the value of the items. That can make replacing an entire household worth of items in one fell swoop a costly endeavor. If you choose the replacement cost coverage instead you won’t have the hard hit of depreciation to deal with. You’ll only have your deductible to worry about.
Valuable Items Coverage
For homeowners who collect art, jewelry, furs, stamps, dolls, and other expensive items, the standard home insurance policy isn’t going to cover the value of one item, much less your entire collection. Valuable items coverage extends the limits to accommodate some of these items.
Building Code Upgrade
Different municipalities have different laws regarding building code when repairing and rebuilding after your home has been damaged. Most of them will require homes to be brought up to current codes when 50 percent or more of the home must be repaired or rebuilt while others have stiffer requirements at 30 or 40 percent. Without insurance coverage that covers these upgrades you could be required to cover the costs of upgrading wiring and other structural changes for the undamaged portion of your home out of pocket.
Damage from earthquakes is not part of your homeowner’s insurance policy. The earth moving beneath your home can cause structural and foundation problems that are expensive to repair. Earthquake insurance will help cover the costs of making these types of repairs in the aftermath of an earthquake.
Homeowners are at risk of flooding from snow melts, winter storms, blizzards, heavy rains, and even construction projects that reroute the flow of waters during heavy rains. That’s in addition to coastal regions that get tropical systems, lakes, and streams that can back up too. Floods are not covered by your homeowner’s insurance policy making the purchase of flood insurance a critical investment for the security of your home and possessions.
Umbrella Liability Insurance
Another coverage no homeowner can afford to go without is an umbrella liability policy. This policy offers protection when you’ve exhausted the limits of your existing liability coverage. It can be a financial lifesaver if someone becomes injured on your property and wins a large settlement or award.