Do You Know What Your Insurance Does not Cover?

When you buy homeowners and motor vehicle insurance, you probably file your policies away without looking at them. And, chances are, you may not take them out again until you need to file a claim. However, it’s worth taking a few moments to review your policies before you suffer a loss. Generally, insurance policies carry exclusions—restrictions on what is and is not covered. Here are some common exclusions you may find in your coverage.

Homeowners Insurance

Flood and earthquake damage is generally excluded from standard homeowners policies. To cover flood damage, you must purchase special flood insurance. You may be able to add earthquake coverage to your existing policy; however, premiums may be expensive, depending on your property’s susceptibility to earthquake damage, and deductibles may be high.

Most homeowners policies cover water damage that is sudden or accidental, such as that resulting from a storm to your roof, or from burst pipes. However, damage due to gradual deterioration, such as that caused by a continual plumbing leak, may not be covered. Coverage for resulting mold or mildew damage is generally limited.

Also, your policy may exclude business-related activity that occurs in your home. If you own a home-based business, you may need to buy separate insurance to cover business equipment and personal liability for customers and associates who visit your property.

Motor Vehicle Insurance

Many people assume they are covered when they drive a car they don’t own, but this is not necessarily true. If you share a residence with someone whose car you drive, it’s always best to be listed as a driver on that person’s policy. If you use a vehicle belonging to someone with whom you do not share a residence, coverage may depend on how regularly you use the vehicle. Even if you use the vehicle as seldom as once a week, the insurer may consider this “regular use” and exclude you from coverage in the event of an accident if you are not listed on the policy.

If you customize your vehicle with special tires and a fancy stereo system, your insurer will most likely not cover any more than the car’s worth at the time of initial insurance, without customizations and improvements. When custom equipment is installed and bolted into a car, your policy may exclude it, but you may be able to cover add-ons by paying extra premiums.

Don’t allow yourself to be surprised by the extent of your insurance coverage at the time you need to make a claim. It’s always best to have the coverage you need before you require it. If you’re unsure of your policies’ exclusions, feel free to give us a call. We can help you understand what your insurance does and does not cover, as well as assist you in securing any additional protection you may require.                                                                                                            

Personal Touch Online, Vol. 15 No. 3, Copyright © 2007 Liberty Publishing, Inc.