4 Less Common Home Insurance Policy Terms To Consider
Posted on: 24 March 2023
When people discuss the terms of a homeowners insurance policy with an agent, they often focus on common issues. You need to have coverage for things like your personal property, the dwelling, and third-party liability. However, some aspects of home insurance policies are overlooked, so here are four of the more interesting ones.
Disaster Coverage
Generally, disaster coverage comes with your policy for the dwelling and its contents. However, insurance companies are reluctant to offer certain kinds of disaster policies in areas where the risks are high. The extreme version of this would be flood insurance for a home that's in a flood plain.
Regardless of where you live, you should clarify which types of disasters are in the standard policy. Someone in California, for example, would want to be sure that their home insurance will cover an earthquake. It is better to feel a little silly asking about a list of home insurance policies than it is to find out after the fact that your policy doesn't cover something.
Replacement Cost
When an insurer pays a claim, the company normally assesses the degree of depreciation of each asset. In other words, almost no home insurance plans provide full replacement costs without an additional policy clause. Depreciation can catch you by surprise, especially if you recently purchased something expensive like a high-end set of appliances. Suppose a kitchen fire destroyed a very nice oven that you purchased last month. If the policy doesn't include replacement costs, the payout could be less than what you'll pay when you get the replacement.
Scheduled Coverage
Some personal property is difficult to value. You might own paintings or family jewels that are irreplaceable, for example. Rather than risk going through the insurance adjustment process, you can request scheduled coverage. In this case, you'd purchase insurance for a specific amount. The insurer will likely want more for the policy than they would otherwise, but you'll have the benefit of knowing that the protection is there.
Home Business Policies
A major trend in home insurance is coverage for home businesses. More people are working from home this decade than in the past. Likewise, they often have business assets in their houses. Inventory for a creative business or a computer for freelance writing is at risk even in your home. If you have a home business, you should discuss policies that will cover your risk exposure.
Contact a professional to learn more about home insurance.
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