Friday, July 27, 2007

Homeowners insurance: Covered or Not?

Q: Does Homeowners insurance cover ANYTHING? Seems all I hear is people getting denied coverage, what a rip-off.

A: Homeowners and property insurance commonly has exclusions. As "all-risk" it generally covers any UNEXPECTED OCCURRENCE as long as it's not excluded.

Let's see.. excluded items:

  • Acts of War
  • Flood
  • Earth movement (earthquake (may be covered under an endorsement))
  • Nuclear accidents
  • Animals, birds or fish (Pets that is)
  • Motor vehicles
  • Aircraft except models or hobby aircraft
  • Property of roomers unless related or added through endorsement
  • Wear and tear
  • Inherent vice or latent defect
  • Smog, wet or dry rot
  • Discharge of pollutants
  • Settling or expansion of pavement walls or roof
  • Damage caused by vermin, rodents or insects

For property insurance including renters, vacant or 'standard market' property can be written on DP1 or Broad form coverage. This covers named perils:

  • Fire and lightning
  • Wind Hail Aircraft
  • Riot & Civil commotion
  • Vehicle damage
  • Volcanic eruption
  • Explosion
  • Smoke
  • Vandalism MAY be covered with an endorsement but usually is excluded if property is vacant
  • May be endorsed for loss of use/rent

DP-3 Special form for property listed above but generally not vacancies. May be endorsed for replacement cost. Includes named coverages of DP-1 and also includes:

  • Vandalism
  • Collapse
  • Glass coverage
  • FD service charges
  • Trees and shrubs (for named perils)
  • Falling objects
  • Weight of Ice & Snow
  • Water leakage
  • Freezing of plumbing or explosion of steam and hot water systems
  • Power surge
  • Damage caused by burglars
  • May be endorsed for liability and loss of use/rent
HO-# the "Homeowners Policy" provides "All Risks" coverage includes above and any other UNEXPECTED EVENTS that are NOT EXCLUDED related to Owner occupied dwelling:

  • Comprehensive policy covers all personal owned property; dwelling AND contents
  • Covers personal liability both on and off premises.
  • Covers personal property on and off premise
  • Loss of use – payment if you cannot live in property
  • Separate structures: garages, sheds, pole buildings fences, pools, any stand alone structure on property
  • Covers Theft and mysterious disappearance
  • Damage to property of others
  • First aid to guests
  • Typically endorsed for replacement cost

This is a fairly comprehensive list. Keep in mind that policies vary by state, company and type of property. To get a idea of what is covered under your policy, consult your agent or read the policy language.


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