Home insurance, what’s insured and what is not?
What is your most precious possession? Depending on your definition of possession you might have answered your family, your wife, your children, your house, your car or your motorbike. Protecting what you treasure is part of human instinct. We don’t need to tell you to take care of your family but you might be failing to protect your most precious material asset, your home.
But I have insurance I hear you complain. Is your insurance suitable? Do you understand what it covers and what it doesn’t? What are your deductibles and your coverage limits? Understanding these and other factors of your insurance can mean the difference between a bad day and a financial ruin. If you have suitable insurance you can bounce right back from an unforeseen occurrence that affects your home, without it you could end destitute and with a massive mortgage to pay and nothing to show for it.
So what does your home insurance likely cover? And what doesn’t it?
1) Damage to your home by fire, lightning, theft, water and snow. These are the basics but can vary depending on where you live and your personal choice. In Nicaragua for example insurance often covers for earthquakes, volcanoes and hurricanes, but there is little need for coverage for damage from snow. Don’t assume your insurance is coverage for your area. Often “basic” insurance templates are sold with little attention to the personal needs of the policy holder.
In most insurances there is no coverage for earthquakes, acts of war and terrorism and floods. If you feel you might be at risk from these or other disasters plan ahead and get them included in your home insurance policy.
2) Your home insurance will likely cover damage and loss of your home contents, like furniture, electrical goods, etc… Please note that it will not cover luxury items or high cost goods like diamond rings, sport cars or property from your work or belonging to some0ne else. If you own expensive goods that stay in your house it is worth getting specific insurance for these items. These specific insurance policies are called floaters and are add-ons to your main house insurance.
3) You are also liable for any damage incurred by people while in your house. Even thieves that enter your property are able to sue you for negligence so it is worth making sure you are insured for injury liability. However even though most house insurance policies include some injury liability coverage it is rarely enough. If you feel that this or any other aspect of your insurance needs a special boost don’t think twice and get an umbrella insurance to raise your insurance limits.