If you own your home and have a mortgage, you are required to carry homeowner’s insurance. Even if you don’t have a mortgage on your property, you still likely have insurance on the home. Homeowner’s insurance will cover damage to your home in case of some disasters, storms, fires and theft. Many Americans aren’t aware of what is and is not covered by their homeowner’s insurance policy. If you aren’t sure, take the time to thoroughly read your policy or call your agent for a list of exceptions.
In many cases, damage resulting from earthquakes or floods is excluded so you may need an additional policy for that if you live in an area where that is likely to be an issue. It is also important to know what your deductible is and understand how it works.
Here are some facts you need to understand:
- Homeowners policies usually do not cover replacement of all of your possessions. Check for coverage caps on personal belongings in your home. These can include jewelry or firearms. You may need to get a separate rider to cover these items.
- Mold damage resulting from a leak is frequently not covered. Mold remediation can cost thousands of dollars so make sure to ask about this if you want coverage.
- Your policy probably does not include damage caused by earthquakes.
- Your policy probably does not cover flood damage. You’ll need a separate flood policy if you want to protect yourself. If you live in a flood zone, you may be required to have such a policy. But, if you live near such a zone, you should consider a flood policy. Flood insurance is normally inexpensive if you don’t live close to water.
- Make sure you understand if your policy is for replacement cost or market value. You will want to be able to replace your house in case of a total loss.
It is extremely important to read and understand your homeowner’s insurance policy. If there are things you don’t understand, ask. As a homeowner, you will still be expected to pay your mortgage even if your home is damaged by a disaster, so this protection is critical to protect your family. Also ask your agent what is covered in case your home is uninhabitable for a period while you make repairs. You will want to have coverage that allows you to pay for another place to live if you can’t live in your home for a time. For additional information regarding the home buying or selling process, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.
Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.