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Wednesday, September 11, 2013

Homeowners insurance: The 4 things it wont' cover

Let's say you just bought a new home and all of the sudden a disaster strikes; home insurance is designed to help you piece everything back together.  At least most of the time that is.  

Although its important when setting up your insurance to speak with your agent about exactly what is covered in your policy.  It's common for new home owners to assume that insurance will pay for any type of damage, but this isn't usually the case and it's important to take the time to understand what is and isn't covered.   

In a Bankrate survey about home insurance, 81 percent were aware that flooding is not covered by regular homeowners insurance.  Yet, many may not know that there are other types of damage also excluded from policies as well.  It's also common for homeowners to realize these exclusions the hard way, after they go to file a claim.  By then, its usually too late.  

Below are five hazards that a standard home insurance policy may not cover:


Despite the health threat that mold presents in a living space, standard homeowners insurance policies either limit the amount of coverage for mold, and sometimes even exclude it entirely.  

If you are willing to pay more for coverage, a lot of policies will allow you to expand coverage limits for old but it can increase your monthly insurance payment quite significantly.  

The best thing to do is to prevent mold from growing in the first place.  Be sure to always watch out for any leaks or possible flooding and if you ever have a question about possible mold, call out an inspector immediately.  

Sewer Backup

As homes go out of date, so do sewage lines and the more they age, the higher the chance of sewage backup.  Blockages from tree roots and other raw sewage is not entirely unlikely to happen.  When a sewer backs up into your home it can damage items such as your floors, walls, furniture, and even electrical systems.  

If you're home is older than 5 to 7 years, adding additional coverage could be a good idea.  The Insurance Information Institute says sewer-backup damage often can be covered for an additional premium of just $40 to $50 per year.


Sinkholes, are those real? It may seem like a scene out of a horror movie but they are indeed real.

Sinkholes are sudden gaps in the earth's surface formed by water erosion.  In the United States, sinkholes tend to cause the most problems in Florida, Texas, Alabama, Missouri, Kentucky  Tennessee and Pennsylvania, according to the U.S. Geological Survey.  Unfortunately, most policies do not cover insurance for anything associated with earth movement such as a sinkhole or even an earthquake.  

Some states such as Florida require the insurer to provide coverage for such things but most states do not.


Just the sound of termites makes most people want to cringe and colonies of anywhere from a few hudnred to several million termites can methodically take over your home.  

Wood, paper, and dead plant material that is in contact with near soil provides termites with a ready source of food and an entry.  Any moisture in the immediate area also gives them the source of water they need to survive.  

However, termites can be very decimating.  Over time, they can destory support beams or other important wood features in a house.  Damage can result to be extremely costly.  But don't expect your insurer to cut you any slack because homeowners insurance policies do not pay for termite damage.  

It's always best to have a licensed pest control company take a look before moving in and periodically throughout living in the home.  Early intervention can help avoid major structural damage.  

In conclusion, it's best to be aware of your home insurance coverage before you sign the papers. Unexpected events come up and the more prepared you are in the beginning, the more money you will save yourself in the long run.  


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