Important Coverages Your Homeowner’s Insurance Policy May Not Have

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Homeowners insurance is one of the most customizable forms of insurance. With the ability to raise and lower coverage, your policy can be fit perfectly for your unique situation. However, there are many additional coverages that your policy may not have, that can really save you big time.

Equipment Breakdown

Equipment Breakdown coverage is, in most cases, available to be added to the policy, but is not included on the policy. Equipment Breakdown offers coverage for the sudden and accidental breakdown of equipment servicing your home. Most often the equipment that would be covered under equipment breakdown is the HVAC unit. In the event that covered equipment suddenly and accidentally breaks down, the you would pay a deductible (usually $500) and the equipment would be covered (usually up to $50,000), which can end up saving you thousands of out of pocket expenses.

Water Backup of Drains/Sewer

On a basic homeowner’s insurance policy, there is coverage for water damage resulting of an overflowing sink, sudden water leak, etc. However, if there is ever damage from water or sewage backing up into the house from an issue down the line, that is not covered unless specifically requested. By adding Water Backup coverage to your policy, you are protected from loss arising from water/sewage backing up into the house. The amount of coverage usually starts at $5000 and can be increased to higher limits as you and your advisor see fit.

Hidden Water Damage

A lesser known, and less available water coverage that can be added to your homeowner’s policy is Hidden Water Damage. Like Water Backup, Hidden Water Damage extends the water damage coverage of your policy. In the vast majority of cases, your homeowner’s insurance will not cover any damage that is a result of ongoing malfunction, rather than a sudden and accidental event. Hidden Water Damage changes that to extend coverage for losses occurring from ongoing malfunction that was not observable.

Replacement Cost Contents

One of the main coverages of a homeowner’s policy is your Personal Property or Contents coverage. It is important to have your contents covered on a replacement cost basis so that if there ever is a loss, you receive enough money to replace the damage property. Without replacement cost contents coverage, the money that you receive will be whatever the damaged property is worth, minus depreciation, leaving you with far too little to fully replace the damaged property.

Extended Dwelling Replacement

These days, most homeowner’s policies are written on a replacement cost basis. That means that the amount of dwelling coverage on your policy should be enough to replace the dwelling should there ever be a total loss. The replacement cost estimation can vary based on the accuracy of the home information, which in the event of a total loss can leave you underinsured with some serious out of pocket cost. That can be avoided with Extended Replacement Cost. Extended replacement cost increases your dwelling coverage limit in the event of a total loss to ensure that there is enough coverage to replace all that needs to be replaced. The coverage can be extended from 125% of the replacement cost, to “uncapped” replacement cost, depending on the carrier.

As you can see there are many additional coverages that can be added to customize your homeowner’s policy to fit your specific needs. Be sure to sit down with your insurance advisor and make sure that you have the coverage that you need, so that you can rest easy knowing that your home is properly protected.