What Does Your Home Insurance Cover?

May 1, 2009
Special Feature

Most homeowners insurance policies are written to cover every hazard except those that are specifically excluded.

Most homeowners insurance policies are written to cover every hazard except those that are specifically excluded. But even policies with comprehensive coverage can have loopholes. It pays to check your policy to see what those gaps are and plug them if necessary. By far the most common exclusion is flood damage, which is rarely covered under a homeowners policy. Unfortunately, many home owners don’t find out that they’re not covered until disaster strikes.

The federal National Flood Insurance Program, which underwrites flood insurance policies, partners with communities in every state to provide home and business owners in those communities with protection against flood damage. If your community participates, policies are available through your local insurance agent. The maximum coverage on a house is $250,000 for damage to the home and $100,000 for damage to the contents. Premiums vary according to the degree of flood risk. The basic rule of thumb is that if you live in an area where flood insurance is available, you should have it.

Another risk that generally isn’t covered by the standard homeowners policy is earthquake damage, which includes damage that results from tremors caused by volcanic eruptions, although damage from lava and ash are generally covered. Residents in areas that are at risk for earthquakes or volcanic eruptions should buy a separate earthquake policy to cover any potential damage. Homes at risk for landslides also need a separate policy to protect against that hazard.