Homeowners Insurance - What's Covered and What's Not

Do you know which perils are covered by your Homeowners Insurance and which are not?  In their 2016 Consumer Insurance Survey the Insurance Information Institute (III) discovered that many homeowners are not aware of what their policy covers and does not.  We thought we would create a list of questions based on the III Survey so you can test your own knowledge.

The Survey Questions

My homeowners insurance policy covers the following damages.  Answer the following questions “True” or “False.”

1. Damage from heavy rain flooding.
2. Possessions stolen from your car.
3. Hurricane storm surge flood damage.
4. Theft of your camera while you are on vacation.
5. A meteorite striking your home or falling airplane debris.
6. Medical payment for a visitor who is bitten by your dog.
7. Your child’s laptop is stolen while he/she is at school.
8. Lightning power surge damage to electronics.
9. Defense costs if you are sued by someone who is injured on your property.
10. Additional living expenses when your home is destroyed by fire.

And the Answers

1. A standard homeowners policy does not cover damage caused by flooding from heavy rain or a hurricane-driven storm surge. More than 20 percent of claims paid under National Flood Insurance Program (NFIP) policies each year go to homeowners living in low- to moderate-risk flood zones.
2. 79% of policyholders recognize that their homeowners insurance provides coverage for possessions that are stolen during a home burglary. But policyholders often don’t recognize that their possessions are also usually covered when the theft takes place away from home.
3. This is another case for purchasing a National Flood Insurance Program supplemental policy.
4. See the answer to question 2. 
5. While the chances of your home being struck by a meteorite are pretty slim, standard homeowners insurance coverage will in fact be there for you in the case of this rare event.
6. A standard homeowners policy will pay medical costs if your dog bites or injures someone.
7. Your possessions are also usually covered when the theft takes place away from home.
8. Some homeowners insurance may pay for this event under certain circumstances. 
9. If you’re sued in response to the injury, your policy will likely help you cover legal costs as well.
10. Standard homeowners policies generally cover special living costs incurred when you cannot live in your home because of an insured loss. Covered costs include additional expenses for temporary housing, hotel bills, restaurant meals and other expenses.

Insurance Policy Centres

Another interesting note in this III report is that more than 69% of us shop our auto policies at each renewal point.  Only 44% of us will shop our homeowners insurance.  When you’re in the mood to check out your homeowners insurance coverage and pricing, give us a call.

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