What would life be without options? Most people assume that all home insurance policies provide the same coverage, or that they cover everything that could potentially happen to a home. They don’t. Due to differences in policy types and what insurance companies provide as standard coverage, there are several options I recommend to most home buyers or owners.
Replacement Cost Contents: Every home policy we write includes replacement cost on the dwelling. Many of the policies, however, come standard with actual cash value coverage on the contents or personal property; your furniture, electronics, kitchenware, clothing, etc. No one is pleased with the outcome of a claim when the contents are insured on an actual cash basis, which is why I automatically include this option.
Extended Replacement Cost: Less than 5% of all homeowners will experience a total loss such as a direct hit by a tornado, hurricane, flooding, or devastating fire. No one wants to find out they don’t have enough coverage after they’ve experienced a total loss. Extended replacement cost adds additional coverage of 25% or 50% of the home’s dwelling value to help ensure there’s enough coverage to rebuild a home after a total loss.
Sewage Backup: Most home insurance policies include coverage for a sudden and accidental water leak, however, most of those policies don’t include coverage for sewage backup. This doesn’t happen very often but it can be a huge mess if it flows beyond the bathrooms and kitchen.
Slow Leak: Coverage for sudden and accidental water leaks is included in most home insurance policies, however, most do not include slow leak coverage. A sudden and accidental leak is one that occurs without warning and is spontaneous such as a water heater failure, a frozen pipe that bursts, or an appliance leak.
Slow leaks usually occur under appliances or sinks, behind walls, or around pipe joints and often go undetected until hardwoods warp, tiles pop, or mold grows on sheetrock because they are hidden from sight. I recommend this option whenever it’s available.
Foundation Coverage: The soil in most parts of Texas has a high clay content which expands when we have rain and contracts when it dries out. While damage to the foundation due to soil movement isn’t covered by any home insurance policy, damage caused by leaks under a foundation from water supply lines is covered.
When I explain this coverage, I point out that it covers access (cutting through the slab to get to the leak) and egress (filling it back in and tying it into the existing slab). I recommend this coverage for anyone who has a slab foundation, as most Texas homes have if they were constructed after 1962.
What options does your home policy include? Share them with us and why you have them, along with your questions and comments on our Facebook, LinkedIn, and Google + pages. I’d love to hear from you!