What Homeowners Often Overlook in Their Insurance Policies

Many homeowners assume their homeowners insurance policy covers every possible scenario. However, several critical aspects are often overlooked, which can lead to significant financial burdens after a disaster.

Homeowners Insurance Considerations

Homeowners should review the following aspects of their insurance policy:

• Severe weather—One of the most common oversights is the assumption that all natural disasters are covered. Standard homeowners insurance policies typically exclude coverage for floods and earthquakes. Homeowners in high-risk areas should consider purchasing additional policies specifically for these events.

• Underinsurance—Many homeowners underestimate the cost of rebuilding their homes. Insurance policies often cover the market value of the home rather than its replacement cost. This can leave homeowners underinsured, meaning their policy may not fully cover the cost to rebuild or repair their property after a disaster. Regularly reassessing the value of your home and adjusting your coverage accordingly is crucial.

• High deductibles—Another overlooked aspect is the deductible amount. Some policies have high deductibles for certain types of damage, such as wind or hurricane damage. The policy’s deductible should align with the homeowner’s financial capabilities to avoid unexpected out-of-pocket expenses.

• Depreciation of home parts—Over time, parts of a home, such as roofs and appliances, depreciate. Standard policies may not fully cover the replacement cost of these items if they are damaged. Homeowners should be aware of this and consider additional coverage for these items.

• Sewer backup and water damage—Many policies do not cover sewer backups or water damage from external sources. Adding endorsements or riders to your policy can provide coverage for these often-overlooked risks.

Learn More

For homeowners insurance near you, contact Craddock Insurance Services.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.