Part of owning a home is knowing how to protect it with insurance. Not all home insurance policies are created equal, after all, and it is important to know the ins and outs of your home and the dangers it faces when exploring the insurance options available.
While every home is different, there are a few common claims that occur each year regarding home insurance. Understanding these common claims and how to prevent them can help you save money and stress.
What Does Home Insurance Cover?
There are two main types of home insurance policies: named perils or all risk. A named perils policy specifically lists out everything that is covered by your home insurance. Anything not included on this list may not be covered under your home insurance policy.
For example, most named perils policies will list coverage for:
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Lightning
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Smoke
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Explosions
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Falling objects
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Theft
Meanwhile, an all risk policy does the opposite. With an all risk policy, you will instead get a list of exclusions. Anything not listed as an exclusion should be covered under your home insurance policy. Common exclusions may include:
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Flooding
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Earthquakes
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Normal wear and tear
Top 5 Common Home Insurance Claims
1. Wind and Hail
Bad storms often include wind and hail, which can cause thousands of dollars in damage to your home by shattering windows, damaging your roof and more. You can prevent the worst of the damage by upgrading your roof to be more weather resistant and reinforcing your windows.
2. Fire
Fires can break out easily due to electrical issues, candles, cooking accidents, lighting strikes, etc. Fire moves fast and can be devastating to your home and your peace of mind.
In order to prevent the worst of a fire, consider living closer to a fire station to cut down on the response time in case emergency services are called. Inside your home, make sure you have updated fire alarms (and check the batteries consistently) and a fire extinguisher. You should also have an exit plan from each room of the house, just in case.
3. Water Damage
Unfortunately, a lot of water damage is not covered under home insurance, such as damage caused by floods. Some damage can still be covered if caused by other incidents, however, and it is important to protect your home nonetheless.
You can avoid water damage and freezing pipes during the winter by improving insulation throughout your home, especially around pipes. Also make sure to clear out gutters and have rainwater drain away from the home rather than pooling to it.
4. Property Damage
Property damage can occur due to a range of accidents, such as vandalism, falling objects and theft, although theft is one of the smaller reasons for a home insurance claim. Even a stray baseball through your window can be costly. While not all accidents can be prevented, you can take certain steps to lessen the damages. This can include keeping your valuables secure, having a burglary alarm in place and reinforcing doors and windows.
5. Bodily Injury and Other Liability Accidents
Among the coverage available under home insurance includes liability. Liability insurance covers accidents that occur on your home’s property, such as if someone is injured in your house. If someone is injured in your home or their property is damaged, liability coverage under home insurance can cover the damages and medical bills as well as protect you from a lawsuit.
To protect yourself against liability accidents, make sure your home is safe for visitors and that no children are left unattended.
Making Sure You Have Coverage
The key to finding the right home insurance is evaluating your risk. With the help of an insurance agent, you can evaluate the risks presented to your home because of location and other factors. Your home should be insured with the total replacement cost value in order to avoid holes in your policy.
A home’s total replacement cost value is how much it would cost to completely rebuild the home after a disaster. This number varies depending on the unique aspects of your home, so be sure to speak with your insurance agent and calculate your home’s assets. As a rule, you should carry at least 80% of your home’s total replacement cost value in home insurance to avoid gaps in your policy.
Be sure to ask your insurance agent about your policy so that you know what is covered and what is not.