If you woke up tomorrow morning and discovered two feet of water in your basement, would your homeowner’s insurance cover the damage?
If you have a standard homeowners insurance policy, the answer is: No.
Surprised? Flood coverage is not the only thing that might be missing in your homeowners insurance policy. Here are four common gaps in coverage homeowners may not even know about:
In addition to floods, earthquakes typically aren’t covered either. In order to get this coverage, you have to add it on separately. Earthquake coverage can be purchased in high-risk areas like California from most insurers. Flood insurance is only available through the National Flood Insurance Program, but most insurers can write the actual policy. Costs for flood insurance depend on the risk assessment for the area. High-risk policies can cost as much as $2,000 a year.
If you live in a high-humidity area, you should check to see if your homeowners policy includes mold remediation coverage. Because mold has gotten so much attention in recent years, many insurers have cleverly eliminated such coverage from standard homeowners policies. Expect to pay about $200 to $300 a year if you want extra coverage.
While a standard homeowners policy will cover the cost to replace some of your property, most policies limit coverage to about $2,500. If you have expensive jewelry, works of art or other property you' like covered, you'll have to buy an additional rider of protection. These are often called floater policies. You’ll need the receipts for these items or an appraisal to verify their value.
Insuring your home for its market value can leave you holding the bag if you have to rebuild. The cost to rebuild the home is often more than the market value. To make sure you are not under-insured, talk to a contractor in your area about how much it would cost to build your home from scratch. Don’t forget to include your home’s custom features.
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