Texas home insurance policies don’t cover everything a homeowner can experience. Neither does everyone need the same coverage across the board which is why all home insurance policies come with options. Policy options allow a person to tailor the level of coverage to their specific needs and tolerance for risk. Some people wouldn’t dream of having a policy without sewage and drain backup coverage while others think such coverage would be a waste of money. Over the next two weeks, I’ll delve into a variety of home insurance options to help you determine what you can or can’t live without.
Replacement Cost Contents: Every home policy I write includes replacement cost on the dwelling. I also include replacement cost on the contents or personal property. This coverage replaces that 50” flat screen you bought last year if it’s lost in a claim without worrying about the value it lost over the last 12 months. The same thing applies to the 5 or 10 year sofa in your family room and everything else in your home.
Extended Replacement Cost: Many home insurance companies offer extended replacement cost which adds an additional 25% or 50% of the home’s insured value to cover the home. This option ensures there’s enough coverage to rebuild a home after a total loss. This coverage is especially helpful if we have an event like the tornadoes that struck the D/FW area in December when hundreds of homes are damaged or lost in one event and building supplies and labor become more expensive.
Sewage Backup: Having sewage back up into your home is a nightmare, and most home insurance policies don’t include coverage for it. Clean up requires a hazmat team which is why I recommend this coverage which is expressed in a dollar amount.
Slow Leak: Coverage for sudden and accidental water leaks is included in most home insurance policies, however, many don’t include slow leak coverage. 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. If the option is available, I recommend it.
Foundation Coverage: Texas soil has a high clay content which expands when we have rain and contracts when we don’t. 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.
This option provides coverage to access (cutting through the slab to get to the leak) and egress (filling it back in and tying it into the existing slab). Anyone with a slab foundation should have this option.
Loss Assessment: This option provides coverage when the association policy pays for a loss due to a claim and in turn assesses the homeowners to help cover what the association policy doesn’t. Examples include a hail claim to the office and community center, wind damage to covered parking, a car running into the wall that surrounds the development, and more. Coverage is usually specified in dollar amounts such as $10,000, $25,000, etc.
Building Ordinance or Law: How old is your home? If it’s older than 10 years old, then there’s a good change building ordinances or laws have changed since your home was built. This option provides increased coverage to bring the home up to code as a part of the repair following a covered loss. Items may include venting of water heaters or furnaces, electrical grounding, and more.
Which of these options do you have to have? Share that with me, along with your comments, questions, and experiences on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!
