Your home is an investment in your security, your future, and the safety of your family. For most people, it is the single largest investment you've made (with the possible exception of your education). Not only is home insurance required if you've financed your home, but it is also a wise decision to protect your investment in your home. However, many people focus only on the basics when buying homeowner's insurance only to discover there were types of coverage they wished they had once disaster strikes. These are some of the specialized home insurance coverages you may not know you need for your home.
Flood and Earthquake Insurance
Most home insurance policies specifically exclude flood and earthquake coverage from the protections offered by the policy. Many people do not believe they need flood insurance if they don't live near large bodies of water. That isn't always the case. In fact, there are many things that contribute to flooding in an area other than large bodies of water. These include things like:
- Excessive rain in short amounts of time
- Construction-related erosion
- Melting snow and ice jams
- Lack or loss of vegetation
The bottom line is that you do not need to live near a river, lake, or ocean in order to need the protection flood insurance provides.
High-Value Item Protection
It is true that your home insurance provides some protection to replace your possessions. However, there are factors to consider with this specific type of coverage.
- Depreciation can decimate the value of your possessions.
- Most policies have strict limits on "like" items (electronics, furs, etc.).
- High-value items such as antiques, collectibles, jewelry, computers, furniture, musical instruments, etc., often far exceed your coverage limits for replacing these types of items.
If you have high-value items in your home, you will want to discuss your options for protecting these items, specifically, with your insurance provider. Often you will need a policy rider for each item you wish to protect.
Ordinance or Law Protection
Cities and states across the country enact laws designed to protect homeowners and homebuyers alike. Many code requirements for homes are designed to improve safety for the people who live inside the home. One common ordinance involves upgraded wiring. For instance, if 25 percent of your home is damaged in a fire and your local ordinances may mandate that you upgrade all the wiring in your home as a result. Unfortunately, your standard homeowner's insurance policy will only pay for replacing the wiring in the damaged section of your home. That leaves the remaining costs your responsibility, which is why you want ordinance or law protection to cover the remaining expense of upgrading to the ordinance requirements.
Work with your insurance provider to learn about these and other types of home insurance you may need for your home, but don't know about.
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