Tuesday, June 6, 2017

Understanding Your Homeowners’ Insurance



 
A homeowners insurance policy will protect you against certain losses and damage to your new home and is generally required by lenders prior to closing.  It is important to know what is covered and what is not.  All too often, it is only at the time a claim is filed that you discover that something you thought was covered is not.  

Typical Homeowners’ Coverage
 
  • Your policy generally provides coverage for a sudden or accidental occurrence to your dwelling as well as attached and detached structures on your property. This includes damage to fixtures such as plumbing, electrical wiring, heating and permanently installed air-conditioning systems.
  • Pays for damage to fences, tool sheds, freestanding garages, guest cottages and other structures not attached to your house.
  • Reimburses you for the value of your possessions including furniture, electronics, appliances and clothing damaged or stolen even when they are not on your property.
  • Pays for some of your additional living expenses while your home is being repaired and covers your financial loss if you are sued and found legally responsible for injuries or damages to someone else.
  • Pays medical bills for people hurt on your property or possibly hurt by your pets.

What is typically NOT covered?
 
Claims related to dog bites, swimming pools or trampolines and operating a business from your home MAY NOT be covered. Common events you may be unaware of that your policy does not cover are identity theft, normal wear and tear, flooding, earthquakes, mudslides and sewer backups.
 
America’s sewer lines are aging and as more homes have been connected to these out-of-date lines, sewage backups have followed. Also, pipelines that handle both stormwater and raw sewage become overwhelmed in rainstorms or blockages from tree roots that work their way into sewer-line cracks can cause backups. Damage to floors, walls, furniture and electrical systems due to sewer backup are not covered. The Insurance Information Institute says sewer-backup damage often can be covered for an additional premium of just $40 to $50 per year.
 
According to The National Association of REALTORS®, policymakers in more than 22,000 communities nationwide rely on the National Flood Insurance Program (NFIP) to protect them from flood risks caused by torrential rain, swollen rivers and lakes, snow melt, failing infrastructure, storm surges and hurricanes. The NFIP expires on Sept 30th which could leave buyers unable to get a mortgage or protection from flooding as flood insurance is required for a mortgage in the 100-year floodplain. The National Association of REALTORS® is working with lawmakers to strengthen the program and also create a path for a private market to take hold ahead of the September 30 expiration date.
 
Limited Coverage Items
 
According to the Insurance Information Institute, jewelry, guns, electronics, collectibles, antiques and the costs of meeting updated electrical, fire, plumbing, building codes and mold may be limited. A breakout of mold on walls not only looks disgusting but also is a health risk that the Centers for Disease Control says can bring about symptoms similar to allergies or even breathing difficulties. A standard homeowners insurance policy generally either limits coverage for mold damage or outright excludes it.

Some insurers offer an endorsement to expand coverage limits for mold claims but only if you are willing to pay more for your insurance. The best cure for mold is to prevent it from growing in the first place, so eliminate the moisture promptly. The U.S. Environmental Protection Agency says homeowners generally can clean up mold themselves if the affected area is less than about 10 square feet. Otherwise, it is best to call in an expert.
Contact Three Rivers Association of REALTORS® for help finding an insurance agent in their affiliate directory that can help you with your insurance needs. Talk to your insurance agent about the property you want to protect and the hazards from which you would like to be insured. Your agent can review the coverage provided by your policy and discuss options specific to your situation. They will answer any important questions you may have.
 
Three Rivers Association of REALTORS® is a non-profit organization that services more than 1,000 REALTOR® and Affiliate members. Three Rivers Association of REALTORS® is affiliated with the Illinois REALTORS® and the National Association of REALTORS®, and works to provide our members with the tools and information they need to remain successful.  We also strive to keep our membership informed as to the latest developments that affect housing and the real estate industry in general. The Multiple Listing Service, education programs and an extensive political action program are just a few of the services that Three Rivers Association of REALTORS® provides for its members.