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What Type of Damage is Covered Under Homeowners Insurance

According to a recent study by the Insurance Information Institute, about 7% of homeowners will file an insurance claim this year. However, almost 100% of those claims will be for property damage, so it is important to know what is covered by your homeowners insurance and to what extent. As a leading public adjuster firm, United Public Adjusters & Appraisers wants you to know as much as possible about your current homeowners policy. This way, in the event that you have to submit a homeowners insurance claim you’ll be fully covered against most contingencies. 

Most standard homeowners policies provide coverage for the repair, renovation, or replacement of your home and its contents should these be damaged or declared a total loss. Usually, this includes damage resulting from water, fire, smoke, theft, vandalism, or from natural causes such as wind, hail, snow, and even lightning. Additionally, covered damages could be the result of external forces, such as downed wires or a fallen tree. Standard coverages address your HVAC system, kitchen appliances, furnishings, clothing, and possessions. Outbuildings may also be covered under a homeowners policy and include a detached garage, shed, and even outdoor kitchens, grills, fireplaces, recreational equipment, walls, fences, and driveways. It is important to note that while a swimming pool may be covered under these policies, such higher-risk items often require additional liability coverages. 

Typically, your homeowners policy will also cover you and your family for living expenses if your home is unfit for habitation and must be rebuilt. Liability coverage is also generally included in your homeowners policy. This coverage will reimburse you for medical expenses and legal fees should someone other than your family be injured while on your property. It is important to know all these factors before you have to submit a homeowners insurance claim. So far so good. Here is where the information regarding your policy gets more complicated.

It is vitally important to know how much coverage (i.e. settlement) you are entitled to in the event of a homeowners insurance claim. At the time you applied for your mortgage, the lender required you to have proof of homeowners insurance. Most lenders, however, only require coverage that’s barely sufficient to pay off your mortgage in the event of a disaster. Years down the road, when your residence has likely increased in value, and you have acquired more possessions, that same policy will not be nearly enough to rebuild your home and replace everything in it. Also, to be considered: the costs to rebuild will have increased since your policy was created. And did you update your policy when you upgraded or made additions to your structure? Increased labor and material costs as well as changes to zoning requirements might also mandate more coverage. 

At this point, you might be wondering, “What are my options?” United Public Adjusters & Appraisers advises that you consider a replacement cost homeowners insurance policy rather than an actual cash value policy. While the replacement cost policy provides coverage to repair, renovate, and/or rebuild your home and contents at current market value, a cash value policy may fall short as it factors in depreciation (especially for furnishings, clothing, HVAC, and appliances) due to age, and wear and tear. Simply put, a cash value policy costs less month to month, but since it only pays the depreciated value, you’ll get less of a settlement. A replacement cost policy may cost up to 15% more every month, but you’ll have the funds you’ll need to rebuild or replace if need be. 

Right about now, you might be thinking, ‘Who do I know who can advise me about the best course of action, so I will be prepared in the event I have to submit a homeowners insurance claim?’ Allow United Public Adjusters & Appraisers to help you avoid that ‘uh, oh’ moment. That’s when you read your property damage policy and discover that the coverage you signed up for is inadequate for your current needs, i.e., to fully cover the damages/loss you’ve just sustained. 

Consult with United Public Adjusters & Appraisers now, before calamity strikes. Our knowledgeable team will review your existing insurance policies and point out any gaps in coverage. That way you can make updates now and be more fully prepared should you have to submit a homeowners insurance claim. Call us today at 800-718-5677 to request a consultation.


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