An insurance policy for your home or apartment is supposed to provide a sense of security. But before you get too comfortable, take time to speak to your agent or insurer to understand what’s covered and what’s not in your homeowners or renters policy.
Indiana Department of Insurance Commissioner Stephen W. Robertson warns Indiana consumers not to assume anything when it comes to their coverage, “Don’t make any assumptions about your insurance policies. Be sure to contact your agent if you have any questions about your coverage. Making sure you are properly covered will help alleviate financial surprises in the future.”
The Indiana Department of Insurance offers the following tips on insurance coverage.
Are you prepared?
More than half of Americans said they don’t have a list of their possessions according to an NAIC survey. Without an accurate inventory, you may not have the right home or rental insurance coverage. Because needs change, you should create an inventory (www.insureuonline.org/home_inventory_checklist.pdf) of your possessions every year. Without this checklist, you may forget to claim items lost due to fire or another covered event.
The NAIC offers the myHOME Scr.APP.book app (www.insureuonline.org/insureu_type_home.htm) to help you capture images, descriptions, bar codes and serial numbers of personal possessions and stores the information electronically for safekeeping. The app organizes information by room and creates a back-up inventory for email sharing. Be sure to share the inventory with your agent or insurer. Periodically update the list as you acquire new things.
Understanding your policy
A standard homeowner or rental insurance policy contains four parts:
- declarations page
- the insuring agreement
- exclusions section
- general conditions
A standard homeowners or renters policy generally provides coverage for either the actual cash value or replacement value of your property with standard building materials. After a loss, you will always have to pay your deductible as outlined in your policy.
There are different types of coverages (www.insureuonline.org/consumer_homeowners_types.htm) under a standard home or renters policy. Rental insurance is different from homeowners insurance in that rental policies only insure the contents, not the structure. Policies vary from company to company, so be sure you read — and understand — yours.
I’m covered if someone breaks in and steals my stuff right?
Most standard homeowners and renters insurance policies cover items that have been stolen (up to your policy limits). Be aware that certain categories like jewelry, antiques, art and other items often have reduced coverage limits unless you purchase additional coverage. If valuable items exceeding those limits are stolen and you don’t have coverage for them, you may receive payment far less than the value.
What if there’s a fire?
A typical policy will issue payment to replace or repair your personal property inside the home damaged by flames, smoke, soot and ash.
While fire and lightning are usually covered, don’t be surprised if your insurance company asks for an inventory. The company is only required to pay for personal property you can prove you owned at the time of loss. The NAIC home inventory app is an easy way to make sure you’re prepared.
Does insurance cover explosions?
Standard homeowners and rental policies will cover damage caused by explosions due to causes such as a gas leak. However, if an act of terrorism causes an explosion, the damage may not be covered. Likewise if your neighbor is experimenting with unauthorized chemicals, damage to your home will be covered. However, if you are doing such an act, damage to your home will not be covered.
My place flooded, now what?
Homeowners and renters insurance generally do not offer protection against flood losses. You should check your policy’s exclusions. It will probably be listed under “water damage.”
Flood insurance (bit.ly/2jJ0Ssu) is available under a separate policy through the National Flood Insurance Program (NFIP).
What about natural disasters like earthquakes, tornadoes and hurricanes?
Damage caused by earthquakes is not usually covered in a standard homeowners or renters policy. However, some policies provide the option to purchase earthquake coverage for an additional premium. Earthquake insurance will only cover you for what is stated in the policy. It will not replace everything you lost.
Unlike earthquakes and floods, tornado damage is typically covered by standard homeowners and rental policies so there is likely no need to purchase additional coverage.
Hurricane damage caused by windstorm or hail is usually covered. However, flood or storm surge damage caused from a hurricane is not. If you have property in an area prone to hurricanes, you should consider flood insurance.
What else isn’t typically covered?
Other perils that are not usually covered include: war, nuclear accident, landslide, mudslide, sinkhole, mine subsidence and any others listed in your policy. Read your policy or speak with your agent or insurer for a complete list of perils excluded and to purchase additional coverage you may need such as earthquake, mine subsidence, flood, sewer backup and other coverage additions.
More information
The National Association of Insurance Commissioners (NAIC) Insure U offers tips on preparing your home for severe storms and other disasters (www.insureuonline.org/insureu_special_disaster.htm). For more resources, visit the Indiana Department of Insurance website at www.in.gov/idoi/2549.htm
About the Indiana Department of Insurance T
The Indiana Department of Insurance (IDOI) protects Indiana’s insurance consumers by monitoring and regulating the financial strengths and market conduct activities of insurance companies and agents. The IDOI monitors insurance companies and agents for compliance with state laws to protect consumers and to offer them the best array of insurance products available. The IDOI also assists Hoosiers with insurance questions and provides guidance in understanding how insurance policies work.
