What Homeowner’s Insurance Does NOT Cover

Once you have moved into the beautiful East Georgia home you’ve just purchased, you feel like you can finally relax. You go about the business of arranging things the way you like them. While you’re doing that, you run across your homeowner’s insurance policy. It just might be a good idea to read the fine print on that, to see what is covered (and, maybe, more importantly, what is NOT covered).

If you have a basic policy, (in professional jargon, called HO-1) you are covered for things which might, but usually don’t happen to damage homes: fire and smoke, of course (unless arson is involved), damage from storms (although some policies don’t cover hail damage), theft, and even explosions. It will even cover damage from your neighbor’s out of control drone dropping through your roof.

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There are some important things that most HO-1’s do not cover, however, and depending on your circumstances you may want to look into upgrading your policy to an HO-2 or HO-3, which will cover more. The language of most insurance policies is precise and specific. For instance, most HO-2’s cover flooding caused by appliances or plumbing, or a sprinkler system going off, but they don’t cover flooding caused by – floods. In other words, if there’s water damage to your home from something in your home, you’re probably covered, but not if the creek rises.

If you want flood insurance, you have to purchase it separately, or at least have it added specifically to your policy. There is a way to figure your risk for flooding at this site. The flood insurance question is a complicated one which needs more discussion than this piece will allow. The best advice is to do a lot of research about who should or should not buy flood insurance, and how much coverage to purchase. To get you started, here is a link to an article with surprising facts about flood insurance.  

Another iffy question concerns damage from a power surge. The HO-2 will usually cover damage to the electric parts of your house, like the wiring, but it won’t cover a computer that the surge damages. You can go further and get a policy that covers just about everything except some things which are specifically mentioned such as: floods, war, landslides, sinkholes, earthquakes, and some other disasters. You can insure against a lot of these things with a specific policy, but not all of them. There doesn’t seem to be a policy available against a nuclear accident anywhere, for example.

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Damage caused by having failed to properly maintain your home, such as the development of mold, probably is not covered. It probably won’t cover sewer backups, sump pump failure, or pollution, either. In places where mining is prevalent, ground movement and holes can occur. For that, you need something called mine subsidence insurance.

Here’s another sticky situation. Your policy probably covers major theft of the family jewels, but it won’t cover identity theft. There is a growing trend to have identity theft coverage (up to a certain amount, such as $15,000) added to a homeowner’s policy. Here’s a link to an article with further references on this topic.

The proximity to a risk can be a factor in whether or not you can obtain insurance against certain kinds of damage. For instance, if you live in an area with high risk of wildfires, and you’ve built your house with straw like the first little piggy, or some other easily inflamed material, you could be out of luck. The trick is to assess your situation, and go over your policy with someone who knows what the risks are, and how best to cover your property. The Davis Team can put you in contact with reliable agents.

The Davis Team can advise you on any aspect of buying or selling a home.  We can help you make buying or selling a home a wonderful experience!  If you or someone you know is planning to sell or buy a home in 2019 we want to hear from you! Please contact us at [email protected], or visit our website at www.eastgeorgiahomes.com. Let us help make your next move a rewarding and positive experience.

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