15 Potential Risks Covered by Home Insurance
Your home is the center of your life. It’s also your biggest investment. So, make sure you cover the unique risks you face with home insurance. Get the right policy that will take care of both small and large risks related to owning a home. Here are 15 potential risks covered by home insurance:
1. Umbrella / Excess Liability Coverage
Risk Factor
You invite guests over for a pool party and one of your guests dives into the shallow end of the pool and is permanently injured. They hire a lawyer to represent them and after a long legal battle, you and your family are left financially responsible for their injuries. Do you have enough money in savings to cover your legal responsibilities as well as the legal defense costs?
Solution
An umbrella or excess liability policy increases your personal liability limits by adding protection over and above your current auto, boat, or homeowners policies – providing real financial value, as well as priceless peace of mind. Excess liability insurance is available either by an endorsement to your homeowners policy or available as separate coverage.
2. Secondary Home
Risk Factor
Owning a secondary home has the potential of increasing your liability exposures.
Solution
Be certain that you extend the liability coverage under your homeowners policy to include your secondary home. You should also consider including the secondary home under an excess liability or umbrella policy to provide for additional liability limits.
3. Miscellaneous Coverage
Risk Factor
The fun that comes with having a trampoline in your backyard can be accompanied by serious risks, which may not be covered under your standard homeowners insurance policy since coverage varies from state to state and between insurance companies.
Solution
You should make sure your homeowners insurance policy covers your trampoline, as many insurance providers refuse to take on trampoline liability and exclude the item from coverage.
4. Medical Expenses
Risk Factor
If a guest is injured while on your property, even when it’s due to a friendly game of baseball, you may be required to pay any medical expenses associated with their injury.
Solution
Your homeowners policy should include medical expenses coverage to take care of injurties and treatment – generally not of a serious nature. In the event a person is injured on your property and requires medical attention, you would be able to submit the injury-related medical expenses to your insurance carrier. Medical expenses are usually paid without a liability claim being filed against you.
5. Personal Liability
Risk Factor
In the unfortunate event that someone slips and falls while on your property, you and your family may be held liabilie for any injuries that result.
Solution
Your homeowners policy includes personal liability coverage to respond to incidents where injuries or damages occur to a third party where you may be deemed negligent. However, you should consider purchasing a personal umbrella or excess liability policy to provide additional coverage limits to protect your assets in case a lawsuit is brought against you.
6. Valuable Possessions
Risk Factor
Typically, there is a sublimit on homeowner insurance policies for valuable possessions, such as jewelry, furs, fine arts, and other collectibles.
Solution
Obtain a personal floater or schedule your valuable possessions to ensure you’ll have the money to replace them.
7. Personal Property / Contents – Property Damage
Risk Factor
When your home suffers damage due to an unexpected event, your personal property is also at risk. Furniture, appliances, clothing, electronics, and other personal items can also be damaged or destroyed.
Solution
Your homeowners insurance policy typically covers personal property, including the contents of your home and other personal items owned by you or family members who live with you. Make sure your homeowners policy includes replacement cost coverage for personal property so that you always receive the full cost to replace whatever item is damaged.
8. Fire
Risk Factor
Most fires are devastating. Besides the emotional impact, the physical damage to your home can be significant. If you lost your home to fire, do you have adequate insurance to replace your home and its contents? Remember inflation rates on building materials and construction costs rarely track with real estate values. As a result, rebuilding a home can often cost significantly more than expected.
Solution
Make sure your homeowners policy contains replacement cost coverage with no cap. This protect you if the cost to reconstruct your home is higher than your current limit of coverage. And, be sure that your insurance includes rebuilding your home to code. Very often, local ordinances and building codes change over time, which may require additional costs.
9. Wine Collection
Risk Factor
If you are a connoisseur of wine, you know that it is susceptible to outside environmental exposures that can ruin it. If the collection is damaged, coverage from your homeowners policy is a possible recourse. However, the damage is only insurable if it is a covered cause of loss as outlined in your homeowners policy. A deductible would also apply.
Solution
If you have a sizeable wine collection, you may want to consider scheduling the collection on your homeowners policy. Doing so expands your coverage and eliminates the deductible in case of a loss. You can also consider unique coverages for wine, such as for spoilage.
10. Collector Cars
Risk Factor
Collector or classic vehicles often have significant value and require special documentation and unique insurance coverage to ensure they are adequately protected. Even if stored on your property, they are typically not covered under your homeowners insurance.
Solution
Insure your collector cars with a specialized insurance company that focuses on and understands the unique nature of collector or classic cars and other vehicles.
11. Personal Injury / Defamation
Risk Factor
Young people are usually very active online. However, using social media and other sites can increase the possibility of them directly or indirectly damaging someone’s reputation and exposing you, the parent, to a lawsuit.
Solution
Your homeowners insurance policy includes liability coverage for property damage caused by any member in the family, but likely does not cover rumors or statements that damage a reputation. You may need to seek additional coverage to include liability protection that covers personal injury or defamation.
12. Water Damage
Risk Factor
Whether entering from outside your home from a flood or from within your home’s plumbing system, water damage is the most common cause of loss to a home. Many policies exclude losses caused by backup of sewers and drains, and all unendorsed homeowner policies exclude damage caused by a flood.
Solution
Careful review is essential to protect your home and belongings from all sources of water damage. We recommend coverage solutions from insurance companies that include backup of sewers and drains. Also, identify cost efficient solutions to address the risk of flood damage in the first place.
13. Flood Coverage
Risk Factor
You do not have to live near a body of water to suffer loss due to flooding. With the changing weather patterns and more damaging storms occurring around the globe, flood losses are becoming more common in places that are not normally prone to flood damage. Your homeowners policy does not cover damage from flood. Could your home be at risk?
Solution
Purchase a flood policy to protect your home and covered contents from certain types of flood losses are designated by the National Flood Insurance Program. A flood policy is purchased as a separate policy through the federal program (NFIP) or through a servicing carrier known as a write your own carrier.
14. Off-Premises Theft
Risk Factor
Surprisingly, standard auto insurance does not cover personal property or contents stolen from your car.
Solution
Most homeowners policies offer an option to include off-premises theft coverage as an endorsement, which covers you for theft of your personal property away from your residence.
15. Additional Living Expense / Loss of Use
Risk Factor
When there is substantial damage to your home due to unexpected events such as lightning, fire, or storm, you may not be able to live in your home until it can be repaired or rebuilt – potentially incurring additional living expenses for lodging, food, and other daily needs.
Solution
Ensure that your homeowners insurance policy provides additional living expense or loss of use coverage to compensate you for the additional costs you incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it’s being repaired or rebuilt.
Get Coverage Today!
The Satanoff Agency, located in Wayne, PA, is an independent insurance agency based in 41 states across the United States, working to supply our customers with quality assistance and insurance. Our independent agents offer their services to help you as the customer get the unique coverage you need.
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