Homeowners Insurance - Frequently Asked Questions
Are deductibles required and if so, what are they?
Yes, most homeowners forms contain deductible provisions applicable to losses occurring under Section I (Section I losses include (a) dwelling, (b) appurtenant structure, (c) unscheduled personal property, and (d) additional living expenses). The type and amount of deductible varies by company. Some companies offer an optional deductible applicable only to wind or hail losses. Most offer higher deductible options such as $500 or $1,000 at a reduced premium.
What property and perils are excluded from most homeowner policies?
Most homeowner policies provide coverage that does not apply to animals, birds, fish, automobiles and business property; for loss or damage caused by flood, surface water, water which backs up through sewers or drains, earth movement, nuclear damage, war, etc. A complete review of your policy is the only way to determine what property is covered and what perils are insured against.
My house was destroyed by fire. I'm trying to collect on my personal property that I had in the house, but the insurance company is telling me I need an inventory. Can they do that?
Yes. Whether your policy pays for the replacement or just the actual cash value, the company is only obligated to pay for personal property that you can show you owned at the time of loss
Our sump pump failed and the insurance company is denying our claim because the water backed up through our sewers. Can they do this?
Most insurance policies exclude water damage from water that backs up through sewers or drains. You may wish to contact your agent and inquire about putting an endorsement on your policy, which would cover sewer back up.
My boat was stolen and now my insurance company will not pay the claim on my homeowner’s policy. Can they deny my claim?
Theft to watercraft, including furnishings, equipment and outboard motors, are typically excluded if the theft occurs outside your residential premises.
I have specifically insured antique items listed on my homeowner’s policy. If I have a total loss, would the insurance company pay me the insured value?
Get appraisals and have your agent establish the stated values in the policy. You should also keep your appraisals up-to-date. If you have a loss and do not have the appraisal value in your policy the insurance company will confirm the value with an independent antique dealer and you should then be paid a dollar value based on the dealer(s) estimate of the worth of the antique items. If you disagree with the settlement offered by your insurer, then you can follow the dispute resolution process outlined in your policy.
A tree from my neighbor’s yard fell and destroyed my fence. Does my homeowner’s policy pay for the damage or does my neighbor’s policy?
Generally, your own policy should cover the loss. Your insurance company may be able to recover the amount it pays you for the loss and your deductible from the homeowners insurance that your neighbor may have if the loss occurred as a result of your neighbor’s negligence.
Recent rainstorms have flooded and damaged my basement. Is there any coverage under my homeowner’s policy?
Flood coverage is generally excluded on the basic homeowners policy. However, some homeowners policies provide coverage for backup of sewers and drains that cause flooding in your basement. You should check with your agent to see if this coverage is provided and how much it costs.
If, however, you live in a flood-prone area, you should consider – and may be required by your lending institution – to purchase a flood insurance policy. Your agent should be able to inform you about the Federal Flood Insurance Plan and the exclusions and limitations of coverage in this policy. Learn more at www.floodsmart.gov
When can an insurance company cancel my homeowners coverage?
Generally, your policy can be canceled for these reasons:
- Non-payment of premium;
- Material misrepresentation/Fraud;
- Conviction of a crime arising out of acts increasing the hazard insured against. (For example, conviction for illegal storage of fireworks);
- Discovery of willful or reckless acts or omissions by the insured increasing the hazard insured against. (For example, not getting a gas leak fixed);
- Physical changes in the property insured which result in the property becoming uninsurable. (For example, should the home become vacant for more than 60 consecutive days, a greater exposure to vandalism and damage is assumed to exist); and
- A determination by the Commissioner of Insurance that continuation of the policy would place the insurance company in violation of the law.
The food in my freezer went bad because I lost power. Does my homeowners policy provide coverage for this?
The basic homeowner policy usually does not. However, this is a popular coverage for insurance companies to offer and you may be able to buy this coverage for a nominal additional premium. Some policies are limited to coverage for electricity lost in the home or where the electricity enters the home. Others will limit coverage to within so many yards from the home. Your agent should be able to tell you about the availability of coverage and how much it would cost.