Wednesday, May 14, 2014

Your Home Insurance vs Acts Of God

There seems to be this ongoing myth that "acts of God" are not covered by your home insurance policy. This is not true. Acts of God are not automatically excluded from your policy.

Your home insurance policy either has a set list of things it will cover (also known as Basic or Broad coverage) or else it says it will cover everything that is not excluded (also known as Special.)

Basic Coverage:
Fire, Lightning, Explosion, Smoke, Wind/Hail, Riot/Civil Commotion, Aircraft, Vehicles, Vandalism/Malicious Mischief, Sprinkler Leakage and sometimes Sinkhole collapse and Volcanic Action (depending where you live).

Broad Coverage:
All of the above plus
Falling Objects (such as a tree falling on your house), Weight of Ice and Snow, Water Damage except flood or ground water.

Special Coverage:
Covers everything that is not specifically excluded. Typical exclusions include flood/ground water, wear and tear, pest and vermin infestation, acts of war, earthquake and ground movement, nuclear war, government seizure. Check your policy or call your agent for more information.

In other words, you have coverage for fire, whether of the wildfire or household variety. You have coverage for wind, hail, hurricanes and tornadoes unless you live in an area that has a lot of them in which case check with your insurance agent to make sure it is not excluded.

You probably have coverage for lightening, for burst pipes, for vandalism, for theft, for a tree falling on your house. The average home policy has coverage if a vehicle or an aircraft hits it; although it may exclude a vehicle owned by you.

You almost certainly do Not have coverage for earthquake, flood and ground water, pest and vermin infestation (such as termites or mice) or anything that can be chocked up to plain old age or wear and tear.

When something happens, I suggest you contact your insurance agent to make sure you know if it is or is not covered. It is generally a few minutes on the phone that costs you nothing. Do not be afraid to call and ask if something is covered before you assume that it is just an act of God.

While you are at it, you may want to check if your home policy provides debris removal and ordinance & law coverage. Debris removal is what pays to remove the rubble that was your house after a covered loss. It is not automatically or fully covered. Ordinance & Law coverage is what pays the extra costs if the town comes along and forces you to build differently because of some law or ordinance that came into affect since you built your home. Your policy is based on the cost to rebuild your house just as it was without regard to any changes you may be forced to make or extra costs to remove what was there. These are two important coverages. Do not wait until after a loss to find out that you do not have these very important coverages.


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