Insurance Policies Protecting You From Major Homeowners Exclusions
Homeowners' Insurance Policies provide protection to homeowners against losses involving their home and personal property, as well as liability insurance for accidents that may take place at the home. This coverage extends to losses resulting from disasters such as fire, theft, civil commotions, etc.
Homeowners' Insurance policies, however, do have exclusions and natural disasters like earthquake and flood are the best examples of these exclusions. These major natural disasters are categorized as "Acts of God" and insurance companies do not provide any coverage for such catastrophes. Another major homeowners' policy exclusion is war (which in insurance terms is synonymous with a nuclear explosion from any source).
Other major homeowners' policy exclusions include perils and risks such as landslide, seepage / water-damage and mold formation, etc. In fact, the exclusions vary according to policy types. Thus, the standard HO-3 policy consists a number of exclusions, including:
- Intentional damages
- Nuclear disasters
- Animals, birds and fish
- Aircraft, boats, cars, motorcycles, trucks and vans with anything more than a small motor
- Property belonging to tenants
- Wear and tear of the house-structure; expansion or contraction, cracking or settling of pavements, walls, or foundations; damages from domestic animals and/or insect and rodent invasions
- Damages to a fence, pavement, patio, swimming pool and/or dock due to freezing or thawing of water or ice
- Theft from a house under construction
- Freezing of pipes in an unoccupied, vacant, or under-construction house
- Damages in case the house has been lying vacant for more than 30 days
- Losses resulting from failure to protect house/property after a loss
- Structures used for a business
Exclusions also vary depending upon the risk factor. Thus, Insurance companies do not provide protection from mold-damages in their homeowners' insurance policies in mold-prone areas that have seen similar large-sum past claims (unless the mold has been caused by a risk factor covered by the policy).
Some of the exclusions are recent changes. Thus, coverage against weather-related perils such as lightening, hail and windstorms have very much been part of Homeowners' Insurance policies formerly. The massive ravages wreaked by the major storms in the past two or three years (Hurricane Frances in 2004, Hurricane Rita and Hurricane Katrina in 2005) have also led to the undoing of many Insurance firms and many private insurers opted to exclude protection against wind and hail from their Insurance Policies.
Protecting yourselves from major homeowners' policy exclusions:
In most cases, a homeowner becomes aware of the policy exclusions only after the disaster befalls. This makes things worse. Therefore, as a homeowner you should thoroughly go through the policy before accepting it. This helps you understand the policy better and give you a fair idea of the exclusions. If you are unable to interpret the clauses, talk to your Insurance agent. In fact, the agent will be better able to inform about comprehensive coverages that will offset the limitations of the policy.
Once you get to know about the policy exclusions, the best way for protecting self from these exclusions will be to seek coverage through a separate policy. Adding endorsement to your policy is the option you have.
The Federal government sponsored Flood Insurance policy is a great way of protecting self from major exclusions in the homeowners' policy. Flood insurance is provided through the National Flood Insurance Program (NFIP), a division of the U.S. Federal Emergency Management Administration.
Back in 1968, NFIP was created as a cheaper alternative to counter the rising expenses for disaster-relief payments in river and coastal areas prone to flooding. However, a community must participate in a FEMA-approved community floodplain program in order to qualify for a flood insurance policy. The program provides a comprehensive training for building adequate drainage infrastructure capable of withstanding the worst of floods. (For more information on flood insurance policies, go through the official NFIP website).
Like the Flood Insurance policies, Earthquake Insurance policies provide protection against major exclusions in the homeowners' policy. Earthquake insurance can be obtained through an endorsement to your existing policy or as a separate policy.
The California Earthquake Authority (CEA) established in 1996 after the disastrous Northridge earthquake, which killed more than 50 people and resulted in about $12.5 billion of property damage, looks after the Earthquake Insurance requirements of the Californians (here it would be worth mentioning that it is the Californians who buy most Earthquake Insurance policies in the U.S.).
Ready help for you :
The Earthquake and Flood Insurance policies provide excellent protection against major exclusions in the homeowners' policies. Nonetheless, you also have access to policies like the HO-1 policy and HO-2 policy to take care of other exclusions. The HO-1 policy provides coverage against losses resulting from a whole lot of man-created and natural disasters like damages from vehicles, explosion, fire, hail, lightning, hail, riots, theft and windstorms, etc. The HO-2 policy provides coverage for the above risks, also providing protection against
- Accidental seepage of water from the plumbing
- Accidental failure of a steam or hot-water heating system
- Artificially generated electricity
- Falling objects
- Freezing of plumbing
- Weight of ice, snow and sleet
Thus, it is always advisable to go through the fine prints of your policy carefully, understand the exclusions and then opt for a policy.--------------------------------------------------------------------------------------------------------If you are a business owner get listed at Best Insurance Site, part of Localwin Network.