Basic Homeowners Insurance: What’s Not Covered

Homeowners are aware of the need to purchase adequate homeowners insurance policy to protect their personal property and possessions in the event of a natural or man-made disaster. But what are some things that a basic homeowners insurance policy does not cover?

Flood Damage

If you live in a high-risk flood area, you will have no choice but to purchase flood insurance to protect your home from the devastation that can be caused by flood damage. It is easy to just assume that you are covered by your basic homeowners insurance policy. However, this is not the case.

Even low-risk areas can experience flash floods or a few extra inches of rain than normal throughout the year. Water damage can cause significant damage to the structure of a home, including personal effects. Unless you upgrade from your basic homeowners insurance policy, you cannot expect to be compensated for your losses in the event of flood damage to your home.

Valuable Property

Do you have a collection of mink coats, Rolex watches or an assortment of expensive jewellery? Even though a basic homeowners insurance policy offers some coverage for valuables, the amount is usually very limited and will not reimburse the full value of the items that are destroyed in the event of a natural disaster.

Look into your homeowners insurance policy and find out more about additional coverage for valuable personal property, so that you can have the extra security in knowing that your valuables will be replaced if they are destroyed, lost or they disappear.

Mortgage Protection

Your homeowners insurance policy will pay for damage sustained to your property in the event of a disaster and perhaps even pay for your interim living expenses as you check into a hotel. But just because you have faced a disaster does not mean you are no longer responsible for paying your mortgage on time each month. This can be a real burden when your home has been badly damaged or completely destroyed, which is why you should look into disaster mortgage protection. This kind of protection will mean your homeowners insurance will pay your mortgage for you while you get back on your feet.

Home Business

Your basic homeowners insurance policy may or may not offer some coverage for business equipment to those who run their own home-based business. If you have expensive business equipment that you use for your business, look into additional insurance coverage so that you will not be out of pock in case of a disaster.

Look at your basic homeowners insurance policy to see what is covered. Some of the things that are not usually covered include flood damage, valuable property, mortgage protection and expensive home-based business equipment. If your policy does not provide these types of coverage, it is worthwhile looking into increasing your coverage.