Home insurance has several options which can be added to a home or condo policy. Some may even be added to a renters policy. These options provide additional coverage to further protect the home or the owner’s contents. Some options may provide additional liability coverage or enhance the protection of the policy holder’s financial status. We’ll examine each of these three areas over the next couple of weeks.
Extended Replacement Cost: Many home insurance companies offer extended replacement cost which adds an additional 25% or 50% of the home’s insured value in the event of a total loss. This coverage can be very helpful when there’s an event like the tornadoes that struck the D/FW area in 2016 where hundreds of homes are damaged or lost in one event. In such cases, there may be a spike in the cost building supplies and labor.
Sewage Backup: Sewage backing up into your home is a smelly nightmare and a potential bio-hazard. In most cases, home insurance policies don’t include coverage for it. Clean up requires a hazmat team which is why I recommend this option. Coverage is usually expressed in a dollar amount such as $10,000, $15,000, etc.
Slow Leak: Coverage for a sudden and accidental water leak is included in most home insurance policies. That coverage applies when there’s a major water leak such as a burst pipe, leaking water heater, etc. Most policies, however, don’t include slow leak coverage. Slow leaks may 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 as they are often 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 heavy 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 lines is covered with this option.
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 add this coverage.
Building Ordinance or Law: How old is your home? If it’s older than 10 years old, then there’s a good chance 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. Examples include venting of water heaters or furnaces, electrical grounding, and more.
Equipment Breakdown: Several carriers have recently added equipment breakdown coverage as an option. Depending on the carrier, this option may repair or replace a major home system such as the central heating and cooling system, swimming pool systems, ventilation, emergency generators, well pumps, air and water filtration, chair lifts and elevators, home entertainment systems and computer equipment. One company extends this coverage to include appliances and another one even includes coverage for additional living expenses if the home becomes uninhabitable due to the equipment breakdown.
Which home insurance options are right for you depends on what risk you’re willing to take on, and what your budget will easily handle. Let me know which one or ones you have on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!