Updating Your Home Insurance Policy? Heres What Youll Have to Know
Its every home owners nightmare: the water levels are rising in your basement. Only this water doesnt smell like ordinary water. It smells like it came out of the sewer. But thats not the worst part: after all the damage is assessed and the situation investigated, it turns out that your home insurance didnt even cover it.
Water backup, they called it. Thats different from flood insurance. You thought you were covered; now, failing to read the fine print means you have to deal with a mess that came out of left field.
Its all part of the same problem: home owners not taking control of their own homeowners insurance destiny, especially at the most critical point: when youre looking at a policy update.
Tips for Updating Your Home Insurance Policy
A home insurance policy update will feel like homework. Your first tip? This is just a feeling. Its not as difficult as it sounds, and youre not getting graded on it.
However, its important to know where you should be covered. About 6% of insured homeowners filed a claim in 2018, for example. Thats approximately one house out of every small neighborhood. Whos going to file the claim this year? Will it be you? Theres no way to tell. But if you take the following tips in mind, youll have a much better chance of being covered if it does end up being your house with the damage to deal with:
Tip #1: Read, Read, Read
In the example above, you saw how one mis-read of the flood damage insurance can leave a total gap in coverage. Simply put, you dont know what you arent covered for. The first step is to read your homeowners policy and see whats written down. Remember: anything that isnt there…isnt covered.
You should also take an approach of active reading. That means asking questions. Underlining what you dont understand. Following up with research if you dont know what water backup coverage is in the first place, for example. Dont just read it through with the intention of signing on the dotted line. That doesnt accomplish anything. Take one sitting, go through the language in your homeowners policy, and figure this out.
Does it sound like a lot of work? Remember: once you sign up, youre done this step. And youll have a lot more peace of mind when you know exactly what youre signing up for.
Tip #2: Target Your Coverage to the Biggest Risks
If you live in Iowa, its pretty fair to say you wont need hurricane coverage. Thats an extreme example of a powerful principle: you should evaluate risk to your home fairly and accurately, and only apply for the sort of coverage that could realistically matter to you down the line.
To take our example, having a water backup is potentially a problem if you have a sump pump on your property. In that case? Youll want to make sure that you have the appropriate coverage. Do some research and find out where your biggest risks are. This will help ensure that youre covered for the most likely events.
Keep in mind that there may be different aspects to specific coverages, depending on your risk. For example, hurricane coverage in the southeast can have different language for different types of hurricane damage. And thats where youll have to step in and make sure you have the coverage you need.
Tip #3: Take a Home Inventory
If theres damage to your home, it means theres also damage in your home, most of the time. Many of the home insurance claims come down to being able to prove what kind of damage was done. So keep track of your most valuable items! Document them so you can prove what was damaged in the case of a flood, for example. Take pictures of the damage. Log everything you can and store the files securely. Youll be glad you did when its time to file a claim.
Understanding Your Home Insurance Policy
Insurance companies arent always how people view them. Many people sign up for insurance believing that its like a subscription servicepay a certain amount a month and you no longer have to worry about one major aspect of your life. But its important to read the fine print.
If you ever have a home insurance claim to be filed, it means that youre potentially at odds with an insurance company. Their responsibility is to pay you out, and their responsibility is to ensure theyre not being defrauded. No insurance company is in the business of losing money. And for that reason, they may be tight with certain restrictions, making it more difficult for you to get the most out of your insurance policy.
The good news: if you know how to document every aspect of a claim and you keep good track of what your policy entails, youll understand why the old phrase knowledge is power is so important in the world of home insurance.
Galen M. Hair, Owner of Insurance Claim HQ, is a property insurance attorney operating in more than seven states including Alabama, Louisiana, Texas and Georgia among others. Galen and his team have helped over 800 families rebuild their homes and businesses. He has been rated a Super Lawyers Rising Star, and voted one of National Trial Lawyers Top 100. To learn more about how Galen and his partner, Alexander Shunnarah, can help protect property from disaster, please visit: https://insuranceclaimhq.com
