Understanding Your Policy
Understanding your homeowners insurance policy might not be at the top of your to-do or want-to-do list, but knowing it can help ensure you make the most of what you pay for and minimize potential issues with filing claims with your insurer. It could even save money!
Every policy varies slightly, yet most include similar core components. The Declarations page typically serves as the starting point and contains summary information such as an insured property description, coverage limits and costs as well as who will assume risk for it. It is crucial that review of this section takes place to make sure all parties involved are listed appropriately and that coverage matches expectations.
The next section of a policy is its insuring agreement, which details what coverage will be included prior to any exclusions or conditions being applied. You may notice certain words highlighted or highlighted; these have specific definitions within your policy that can be found within its Definitions section of policy; your independent agent can assist in explaining any unfamiliar terminology or phrases that arise during policy issuance.
Flood Coverage
Homeowners’, condo and renter policies typically do not cover flooding damage; rather, this form of loss must be insured against through the National Flood Insurance Program (NFIP).
Floods are sudden and widespread overflows of water onto land that is typically dry. A variety of causes may contribute to floods, including overflows from inland or tidal waters; accumulation or runoff from surface waters; land collapse caused by erosion or undermining along lake shores and similar bodies of water, collapse or subsidence of shorelines due to erosion; collapsed roofs on buildings at risk due to undermining or subsidence, as well as mudflows.
Physical damage caused by flooding is generally covered under the National Flood Insurance Program, with certain restrictions. Sewage backup may be covered if it directly results from flooding, but money, precious metals or valuable papers cannot be covered under it. Furthermore, specific coverage limits exist for both buildings and personal properties – to determine what you might require best, take an inventory of your belongings; make a note of receipts for major purchases like wall-to-wall carpeting or electronic equipment as it will help your insurance agent determine coverage needs more easily.
Depending on where you reside and whether or not you receive a mortgage loan from a federally regulated lender, you may be required to carry an NFIP policy. Most policies have a 30-day waiting period so it’s wise to shop around early on for coverage before an expected flood hits.