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3 Coverage Gaps In Homeowner’s Insurance Revealed
You might think that all your belongings in the home are covered because you have homeowner’s insurance.
You are actually wrong.
It is already a complicated world we live in, and we have to exhaust more energy to work these things out. But ignore them at your own peril.
There are actually 3 instances where you will have little to no coverage. Have your attention yet?
1) Dollar limit
When a dollar limit is set on the particular type of property.
You should be able to find a list of items under Coverage C of your policy. And beside the items, there should be a limit set for it.
If you find that you have items that fall under the list which are way more valuable than the coverage limit itself, you have to buy extra by paying an extra premium.
2) Value determination
When a value is difficult to determine for the property. There can be many reasons why this is so.
Art for example is something where value is subjective. One person might value it at $1 while another values it at $100,000.
Things like antiques face the same problem with valuation.
When some causes of loss are specifically excluded.
You will find within your contract a list of causes resulting in property loss or damage that are excluded from cover. It should be specifically spelt out.
There is no industry standard on this and you will have to spend your own time going through your policy to find out the specifics. The opposite can also be true. There can be a list of causes that will be covered.
Anything outside this list will be excluded from any claims.
Now that you can see the gaps, you must be curious on how to patch them up.
The good thing with insurance is that there will always be a way. And the solution is always a matter of more premium.
A straight forward strategy to address all 3 gaps is to specifically create a list of items with their values and requested coverage. Using this schedule, the insurer will work out a new price that you have to pay.
By going this way, you will have cast the broadest net. You eliminate the causes of loss clause as they are all covered, except some extraordinary reasons.
You will also have no deductible. And when a the time comes for you to make a claim, there will be less challenges as everything is laid out in black and white.
The main disadvantage is that you have set the values of your personal properties down on paper.
This means that in the event that your artistic oil painting rises in value, you are still only insured on the stated amount unless you initiated an amendment to the appraised value.
Another option you can consider is to get special perils content coverage.
This basically protects all your valuables from any reason you can think of, no matter how radical they are. But of course, again, it comes with some specific exclusions.
The fact of the matter is that when you are someone who has a flair for valuables or collectors items where value is hard to pin down, you should seriously getting them fully insured by taking the extra step of additional coverage. Normal homeowners coverage is often insufficient.