Thursday, March 18, 2010

About Exclusions on Homeowners Insurance

So you’ve made the down payment, you’re up to date on your mortgage, and you’ve insured your home. You think you’re sitting pretty and that your property is covered by your policy, so even in the event of a calamity, you’re not going to suffer a major financial loss.

But when it comes to insurance, what you don’t know usually dwarfs what you do know – for example, how many people know that some insurance policies (even those that promise to provide “complete” coverage) come with many exclusions? For this reason, you should be certain that you choose an agent you can trust and a reputable insurance company that puts your best interests first.

In general, most policies have the following exclusions, that is, they do not pay up when the below events occur and destroy your home:
  • Flooding or other natural disasters – if you live in areas that are prone to earthquakes and frequent floods, you have to buy additional coverage to protect against these catastrophes.
  • Renovation costs that you must incur in order to comply with building codes. This is also an add-on coverage, but is usually not a problem.
  • Destruction or confiscation by the government due to encroachment or other illegal acts.
  • Destruction due to war or acts of terrorism (some policies pay out when terrorists hit while others are becoming more choosy because of the increase in acts of terrorism) The government themselves may help if it's a case of terrorism, however.
  • Neglect – when you’ve left your home unattended for a period of a month or more and return to find it vandalized or damaged. Most homeowners policies are priced based on someone living in the home. They will not deny a claim if you are on an extended vacation, but if you leave and remove the contents, it no longer becomes a "homeowner's" policy.
  • Damage caused by water and sewage backup – you will have to pay more to protect your home against these events. Water claims such as a busted pipe, roof leak, washer hose leak, etc., are covered. You would have to add coverage for water backup because it is closely related to flood and flood is excluded. Usually there is no issue with water backup unless there is a flood.
  • Damage caused by wear and tear, rust, corrosion, and gradual degradation. Insurance is not a maintenance policy. As an owner, you are responsible to maintain your property. Insurance is for sudden and accidental loss such as fire.
Besides these, your insurance company can refuse to pay out if they’re able to prove that you provided falsified information when signing up for the policy. So if you’re fudged a few facts to reduce your premium and recurring payments, you may end up being the loser when the time comes to stake a claim.

You’re also responsible for maintaining your home well, and undertaking repair work on previous claims – if you fail to do these things, you’re not allowed to claim for damages that result from your negligence.

The best way to ensure that you’re covered completely is to ask the right questions and be fully informed before you sign up. Visit our website for more information on SC Homeowners Insurance and how to get the cheapest car insurance in South Carolina.
This guest post was contributed by Nicole Adams.  Nicole writes on the topic of construction management and welcomes your comments at her email id: .


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