Beware These Four Situations Where Homeowner’s Insurance Won’t Protect You
If you’re a homeowner, you probably know about the importance of having homeowner’s insurance. When disaster strikes, nobody wants to have significant problems with their house or condo. Fixing damage left by a flood or fire is incredibly costly. Many people assume that their homeowner’s insurance will protect them in these cases. However, as KOMO news pointed out recently, this is not always the case. Flood insurance, for example, is optional and depending on where you live, may not be covered by standard homeowner’s insurance. “Every year [insurance companies] get calls from homeowners who try to file damage claims, only to learn that flood protection requires a special policy.”
Your homeowner’s insurance might not cover four other problems in particular: water damage, asbestos, wear and tear, and bad contracting jobs. We’ll look at each one of these and how you, can be a responsible homeowner and protect yourself from these tricky situations.
Water damage is perhaps the most common source of problems, especially in the cold and rainy Pacific Northwest. There are two types of damage: sudden and gradual. “Sudden” issues are ones that happen quickly. Think of a water pipe bursting. That’s sudden damage. Gradual damage is the result of a problem that has been going on for many years. An example of this would be a leaky pipe that has rotted the wood and invited unwanted mold.
Sudden damage is usually covered by your homeowner’s policy, with some caveats. If you live in certain areas, then a “sudden” flood may not be covered. Sometimes insurance companies also distinguish between an event that occurs as a result of a long-standing issue. In the case of a water pipe bursting, the insurance may cover the damage resulting from the water but not the pipe itself, figuring that the pipe repair falls under “wear and tear.”
Read your policy carefully to see what is and isn’t covered. If you live in a flood zone or expect to have other water damage, ask your agent what you can do to be protected.
Asbestos was used for insulation, fireproofing, and creating stronger materials. In 1973, the Clean Air Act outlawed its usage due to its adverse health effects. Yet, many buildings constructed before 1970 still contain some form of asbestos. It can reside in drywall, popcorn ceilings, and vinyl flooring. If that becomes damaged (e.g., due to a flood), legally, you’ll have to remove the asbestos as part of the repair. That adds substantial costs to the project. Some homeowner’s policies have an outright exclusion related asbestos abatement, which means you’ll have to cover that yourself.
General Wear and Tear
An insurance policy will not cover issues that arise from general wear and tear or homeowner’s negligence. Going back to the example of flood damage, if the insurance company determines that the accident occurred due to improperly cleaned gutters, they may deny the claim. Clogged gutters mean that rainfall won’t drain off the roof correctly and will collect around the foundation.
No insurance policy will protect you against this type of damage. The only way to avoid having to pay it is to make sure that you diligently perform reasonable home upkeep.
Unfortunately, most homeowner’s insurance policies won’t cover some problems caused by contractors. If the contractor does a bad job of installing your new roof shingles, for example, you’ll have to either have them fix it or sue them to recuperate the damages. If they accidentally set fire to your place, then insurance will cover that. Policies frequently exclude “faulty or inadequate workmanship” from its protections. Many contractors’ insurance policies also exclude faulty workmanship, so you would have to file a lawsuit to get money back from a shoddy job.
Review Your Policy
With the winter approaching and as you’re spending more time indoors, it’s an excellent time to review your policy. Check to see what it says explicitly about water damage, asbestos, general wear and tear, as well as contractors and work quality. If you feel like your insurance isn’t up to par, contact your agent today and see if they can cover what you want. It’s better to pay a little more each year than have a massive repair bill that is impossible to pay.
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