Insurers Get Stingy with Homeowners Coverage

Think you know what's covered, and what's not, by your homeowners insurance policy? It's time to look again: A number of insurers have begun to exclude some common hazards that standard homeowners policies traditionally covered.

This year’s hurricane season has been relatively mild so far, so you may think there’s no reason to check your homeowners policy to see if it’s up-to-date. That could be a big mistake, because there are several hazards that the standard homeowners policy doesn’t cover.

Even if you’ve escaped the hurricane season up to now without any damage, there are other threats to your home. For example, you don’t need a hurricane to suffer wind and rain damage. For years, standard homeowners policies covered this type of damage but now, in many areas where hurricanes and tornadoes are common, insurers have separated coverage for wind and rain damage from the standard policy. To be covered, policy holders in these areas must purchase a special rider.

If you think your insurance covers losses due to other natural disasters, like flood or earthquake, think again. Homeowners in areas prone to these types of events need separate insurance policies to protect their property. And keep in mind that there are less-obvious loopholes in your insurance coverage. For example, if you live in an older house, there’s a good chance that it doesn’t conform to your town’s current housing codes. You’ll have to meet those standards when you repair the damage, but your policy won’t pay for any additional costs involved unless you have an Ordinance and Law rider.

Another area you need to consider is mold damage coverage. The number of claims for mold damage has risen sharply and many insurers are limiting their liability, either by imposing limits on coverage or excluding mold claims entirely. Check with your insurance agent to see whether you are covered for mold damage.

There are other hazards that your standard homeowners policy doesn’t cover. The exclusion of flood damage, for instance, usually comes under the more general heading of water damage, which also excludes coverage because of broken or clogged sewer lines or septic tanks, as well as any damage that occurs if these systems back up. And if you maintain an office in your home, you may need a special rider to cover computers, printers, copiers and other equipment used there.