Homeowners Insurance FAQs
Who decides on the type of insurance, the mortgage company or me?
You do. The mortgage company collects a set amount from you each month in order to protect their investment. This money is put in escrow and covers your insurance and taxes. However, the policy is still yours and you might select the insurance you feel offers the best coverage at the best rates.
What exactly does a Homeowners policy cover?
“Exact” coverage is impossible to define because there are different policies and about 900 insurance companies writing Property/Casualty business in the United States. However, 80% of Homeowners policies are based on a standard form. All Homeowners policies cover two important areas: Property and Liability. Property insurance covers your structures and possessions. Personal Liability, as its name implies, means you’re legally obligated to pay money to another person for actions caused by you, your family, or your property. That liability extends to medical payments to others for injuries caused by you or your family.
Are floods, earthquakes, and other natural disasters covered?
Most catastrophes are covered. Flood and earthquake damage, however, are not covered by a standard policy and both perils are more common than many people realize. We can advise you on such normally excluded conditions as floods and earthquakes.
Are there exclusions I should know about?
Exclusions listed and defined in your policy might include neglect, intentional loss, “earth movement,” general power failure, and even damage caused by war. If you fail to take care of your property (e.g., a leaky roof), you might not be covered. Obviously, if you intend to lose an object or damage your property, there’s no coverage. One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs might not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than those you’re replacing, the new materials might not be covered fully. This situation was faced by many Florida residents in the last decade after more stringent building codes were enacted following several disastrous years of hurricane related damage.
As your independent agent we may offer many types of policies from many different insurers. Although the companies we represent have different ways of offering coverage for ordinance or law based upon costs and inclusions, you need to be aware of your policy’s specific protection value. Please review your policy to find out exactly what it offers for ordinance or law coverage, or contact us to help in your personal policy review.