Biting dogs and terrorists. Creeping mold and earthquakes.
list of exclusions keeps growing, so think about the risk
factors in your life and check your
people think about their homeowners insurance only a few times
in their lives: when they select their insurer, when they’re
writing premium checks and when they have a claim.
the time something goes wrong, however, it’s usually way too
late to begin learning about your policy.
been more true than right now. Premiums are shooting up, and
insurers are trying to stem huge losses by refashioning their
policies -- leaving you more exposed than ever.
are some gaps in your coverage you can’t do anything about, of
course. Insurers aren’t going to cover you for a nuclear
accident, for example, no matter how many companies you ask.
Many so-called “exclusions,” though, vary by the
insurer. If you know about them in advance, you may be able to
switch carriers or buy extra insurance to stay protected. So
pull out your policy and check for the following:
Mold and water damage
A year ago, if a pipe burst in your home,
your insurer would probably pay for the damage, including mold
remediation. Now you may not be covered for the
A huge increase in mold-related claims in
Texas, California, Florida, Nevada and Arizona has many
insurers scrambling to eliminate or at least reduce their
Regulators in 35 states are now allowing
insurers to cap their mold coverage or exclude it from
homeowners policies altogether, said Dave Dasgupta, spokesman
for the Insurance Services Office, which supplies statistical
data to property and casualty insurers. Many insurers are
limiting how much they’ll cover for water damage, as
While not all insurers are taking advantage of
the opportunity, you should check your policy now and when you
renew to see if you’re covered and for how much. You might be
able to get more coverage from another insurer if you shop
War, nuclear accidents
If your home
is burned down in a riot or other “civil commotion,” your
insurer probably will pay to rebuild it. If your home is
damaged by an invading army or is irradiated by a nearby power
plant, however, you’re not covered. If your house is destroyed
during a terrorist attack, you also may be on your
Insurers have long excluded war and nuclear
accidents from the list of perils they cover. Until Sept. 11,
though, most homeowners’ policies either covered terrorism or
were silent on the issue, which usually implies
Since the World Trade Center attacks, an
increasing number of insurers are specifically excluding
terrorism coverage from their personal insurance lines, such
as homeowners, in addition to banning it from their commercial
Nine states (Arizona, Colorado, Idaho,
Indiana, Kentucky, Mississippi, Missouri, North Dakota and
South Dakota) essentially allow any insurer to exclude
terrorism coverage on their homeowners policies. Other states,
including California, are approving the exclusions on a
If your home burns down in a wildfire,
you’re probably covered if you live in a developed area. If
you live in a remote cabin or your home is rattled apart by an
earthquake, inundated by a flood or blown away in a hurricane,
you may not be.
The more likely you are to be a
victim of a natural disaster, the more reluctant insurers may
be to cover you. That’s why residents of the Gulf Coast or
Atlantic states typically need to supplement their homeowners
insurance with hurricane coverage offered by a high-risk pool.
California residents, meanwhile, get earthquake coverage from
the state-run California Earthquake Authority or from a
handful of insurers willing to write earthquake
Many insurers won’t cover fire risks for
people who live in forests or far from fire stations. That’s
true even though some of the biggest wildfire losses have come
in developed areas: the Oakland Hills fires of 1991, for
example, or the Laguna Beach and Malibu fires of 1993. Most of
those homeowners were covered for their losses.
meanwhile, aren’t covered under homeowners insurance policies.
The National Flood Insurance Program, run by the Federal
Emergency Management Agency, offers coverage.
the victim of a landslide, however, you’re pretty much on your
own. That kind of “earth movement” usually isn’t covered, so
it pays to get a geologists’ report before buying any home
near a cliff or on a hill.
If a tree topples over in a windstorm and
crushes your house, you’re covered. If your home collapses
because of a termite infestation, you’re probably
Insurers expect you to take care of your
home and deal with any maintenance issues on your own dime.
Insurance generally covers “sudden and unexpected” losses --
not losses from termites, rodent infestations or a water leak
you never quite got around to fixing. You’re expected to
detect the problem and prevent the situation from getting out
of control. If you don’t, any damage done typically won’t be
covered by your insurer.
Bruce Johnson, author of “50
Simple Ways to Save Your House,” recommends you conduct
regular inspections to detect such problems. At least twice a
year, tour the exterior of your home looking for cracks, decay
or water damage. Check the condition of the roof and inspect
the basement or crawlspace for other hidden problems,
including rodent droppings, termites or leaks. If you find a
problem, fix it. Remember that home maintenance problems
usually just get more expensive.
you own a toothless Chihuahua, your insurer probably doesn’t
care. Buy a pit bull, Rottweiler or wolf hybrid, however, and
you may find your insurance gets more expensive -- if you can
persuade your insurer to cover you at all.
bites cost insurers about $310 million a year, and an
increasing number of companies have a blacklist of breeds they
won’t accept or charge more to cover. Pit bulls, which lead
the Centers for Disease Control list of deadly breeds, are
particularly unwelcome. Other troublesome breeds include
German shepherds, Rottweilers, wolf hybrids, huskies,
malamutes and Dobermans.
If your dog has ever bitten
anyone, regardless of its breed, you’re probably going to have
trouble getting coverage as well -- particularly if it was an
Each insurer has different policies,
though, so you may be able to find affordable coverage if you
shop around. You also can ask the insurer to exclude your dog,
meaning that you’ll pay for any damage it does.
have a dog that bites or lunges at strangers, however, get rid
of it. The risks to your pocketbook and your neighbors are too
If your ex sets fire
to your home, you’re probably covered. If the fire is started
by your rebellious teenager or an estranged spouse, however,
you may not be.
Intentional damage by an insured
person -- or by the person’s spouse, children or relatives
living in the house -- typically isn’t covered. Estranged
spouses often come into a gray area. Although they may not
live in the home, they may be listed on the policy or the
property deed and be considered to have an “insurable
interest” in the home. Companies have, in fact, made this
argument to deny or limit coverage to homeowners whose
property was damaged by an estranged spouse.
advocates complain these policies are unfair, since there’s
often no way to prevent such damage. If you’re worried about
the risk, however, it may motivate you to get help for a
destructive teen, beef up your home’s security system or reach
a quicker divorce settlement.
If you have a personal computer or two,
your homeowners insurance may pay you enough to buy a new one
-- or it may not. If you’re running a home business, however,
your homeowners insurance almost certainly will fall
Here’s another area where it pays to read
your policy. Some insurers will give you a check only for what
your computer equipment is worth now, which is probably a
fraction of what you paid for it. Even those that do pay for
replacements typically have a cap, often about $2,500. Many
require you to have supplemental coverage if you want a bigger
check than that, or if you run a business from your
Read your policy, note the limits and talk to
your insurer about supplemental coverage if you need
Luxury items and
If you don’t
own anything special, the entire contents of your home are
probably covered under your homeowners policy. If you have
antiques, guns, jewelry, collectibles or fine furs, you may
need extra coverage.
The typical policy limits
coverage for luxury items and collectibles. You might get as
little as $200 for the coin collection you were hoping would
fund Junior’s college, or $1,000 to cover all your jewelry,
watches and furs.
Once again: Check your policy, and
buy supplemental insurance if you want more coverage.
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