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Executive Order for Policyholder Payments
As a significant number of myths surround homeowners insurance, it is always advantageous to review your policy carefully and understand what it exactly covers. Assuming a standard policy covers "everything" is dangerous because such policies often have limits. Here are 5 common homeowners insurance myths that you should be aware of.
One of the most widespread myths about homeowners insurance is if you live in a region with frequent natural disasters, your standard policy will cover all types of damage. The standard policy indeed covers damage caused by hurricanes and tornadoes. However, flooding and earthquakes aren't covered in standard plans and require additional special coverage.
If you think your standard homeowners insurance policy covers all your belongings, be aware it might not. Hence, it's essential to review your policy and talk with a trusted insurance expert. Perhaps much of your valuable possessions, including jewelry, are covered, but certain other valuable items might be only partially protected.
The best way to ensure that all your valuable items are protected from damage or loss is to have your insurance agent appraise each item. These belongings will then be listed in your home inventory with the insurer.
If mold develops somewhere in your house and is neglected, it can spread throughout the home and lead to expensive repairs. Damage caused by termites and other critters can also be costly. Does your standard plan cover this type of degradation?
Insurance companies typically require extra coverage for this category of degradation since it falls under maintenance instead of regular wear and tear. As a homeowner, you're expected to keep up with the condition of your home. Using a humidifier can help reduce mold by up to 60 percent. It would be best if you had your home inspected at least once a year to catch any damage caused by outside influences at the earliest possible.
When unforeseen disasters destroy your home, you might wonder how the payout relates to the property's current market value. It doesn't at all, as a standard policy covers rebuilding costs of labor and materials. Keep in mind these costs are directly affected by economic conditions and can be higher than expected.
You can know your estimated rebuilding costs by discussing your policy with your insurance agent. An often overlooked factor is that older homes might not be up to current local building codes. Rebuilding your home to be compliant with current codes might mean unexpected extra costs. Your agent can review your options, so you are prepared for a disaster. This way, you can acquire more coverage with only a minimal increase to your premium.
Renters should never assume that they are automatically covered by their homeowners insurance plan. The policy will cover rebuilding a home if it burns down unless the cause of the fire turns out to be neglect. However, it will not protect a renter's personal belongings within the home.
A high percentage of renters are unaware of the appropriate insurance coverage they need. To ensure that all valuable possessions are protected, renters should apply for their own renters insurance policy.
Debunking common myths about homeowners insurance can prepare you for the worst-case scenarios. Your home is generally covered for disasters, damage, and theft, but not every loss imaginable. You can still cover everything valuable by adding coverage for items appraised by your insurer.
If you have further questions about standard homeowners policies and supplemental coverage, contact the experts at Club Agency Insurance Brokerage in Garden City, New York today. We are ever willing to assist you with all your coverage needs.
