Think your home or other property is fully covered in the event of an accident or disaster? Think again. Your property insurance situation may be in a more precarious spot than you realize. Remember: forewarned is forearmed. Here are five property insurance facts you need to know before disaster strikes:
Most Homeowners Are Underinsured
According to a nationwide insurance coverage study conducted by research and investing company Marshall & Swift, approximately 67 percent of homeowners nationwide are underinsured by an average of 35 percent. This means if an accident or incident happens, you may not have the money to replace your home or cover bills. Talk to your insurance agent and read the fine print on your policy. Do your homework to make sure your property and possessions are adequately covered.
Not Every Type Of Damage Is Actually Covered
A standard homeowner’s insurance policy should cover most situations, including basic coverage for your home’s structure, your personal belonging, loss of use of the home in the event of a disaster, and general liability. However, contrary to what you might believe, your policy doesn’t cover everything.
For example, your policy may state in the fine print that a covered incident must be “sudden and accidental.” If you’ve had a leaky faucet that caused damage to your walls over a long period of time, it probably won’t be covered simply because you neglected proper maintenance of your home.
Even some sudden incidents aren’t covered, for example, certain natural disasters, such as natural floods or earthquakes are never covered in a standard home policy. If you wish to cover your property from these events, you’ll need to purchase extra insurance or an entirely separate policy. Tornadoes and hurricanes are typically covered by standard property insurance. However, in some higher risk areas, such as near the coastline, you may find that insurance sold there contains separate deductibles for damage caused by these disasters.
If you run a home-based business—with customers who come into your home, special equipment, or inventory—your business generally isn’t covered by your homeowner’s policy. You’ll need a separate commercial insurance policy. You’ll also need a different type of policy if you turn your home into a rental or vacation property, such as an Airbnb rental.
Some Belongings May Not Be Fully Covered
You can sleep easy at night knowing that your valuable personal possessions are insured against disasters and theft under your property insurance policy. However, many people don’t realize that certain types of items come with coverage limits or caps on how much they can be covered for. High-end items such as jewelry, watches, furs, silverware, electronics, and firearms are typically limited to $1000-2000 dollars of coverage for each item. So, if you happen to have a piece of jewelry worth $10,000 that gets damaged, lost or stolen, you’ll come up short in coverage.
The motto here is to pay close attention to the homeowner’s insurance limits on your possessions inside and outside of your home and consider adding a rider or endorsement to juice up your policy when it’s needed for especially valuable items.Your Home Remodeling Project Isn’t Automatically Covered
Your Home Remodeling Project Isn’t Automatically Covered
Thinking of adding a guest bathroom to your home or digging a swimming pool? If so, check your policy and let your insurance company know before you begin your project.
Chances are, you’ll need to update your home insurance policy to reflect the additions and determine whether you’ll need financial protection during the course of the project. If you fail to do so and the project is damaged in the process, your renovation may not be covered. Additionally, you run the risk of getting dropped by your home insurance company. For this reason, it’s best to be totally up front with your insurer.
And before you start any remodeling, make sure all contractors involved carry their own insurance and ask to see it before they start working. Their insurance should include both workers’ comp and general liability policies. If they don’t have sufficient coverage, one of their workers could sue you if he or she gets hurt on the job.
Maintaining A Home Inventory Should Be Priority
Finally, you should take stock of all your belongings. Not only does a complete home inventory give you an idea of the exact value of your belongings while proving their existence, but it’s also an accurate way to determine a sufficient personal property coverage amount for insurance purposes. In addition, having a full record of your assets is highly useful during the claims process if you ever experience a loss.
However, recording the details of your household items — from brand and model, to purchase price and serial number — is no simple task. In fact, your best option would be to hire a professional home inventory service that can give you the full imaging of all items, documentation, research and safe (off-site) storage of your inventory records that you need. A thorough and professional home inventory could mean the difference between financial hardship and quickly getting back on your feet if you ever need to file an insurance claim.
TakeStock Inventory stands ready to assist you with protecting your valuable assets. Contact us at 844-9-CYA-NOW (844-929-2669) or complete our contact form to request a free consultation.