5 Home Insurance Assumptions That Could Cost You

Your house and land are likely the largest assets your family owns. They need proper protection, and failure to provide such can ruin your finance sand your stability. Despite this risk, many homeowners make costly assumptions about their insurance coverage. What are some of these dangerous assumptions? Hereafter of the most common.

1. Assuming Flood Coverage
Flood scan happen when too much water comes from above and when it comes from below. Some sources of flooding are covered by standard home insurance, but others aren't covered at all. Generally, if heavy rains and storms damage property, it's often covered. Backed up drains causing flooding in your basement, however, are likely not.

Flood insurance is available to just about anyone, but it can be complex. You may need more than one policy or special riders to protect your property from this hazard.

2.Ignoring Local Risk Factors
Every part of the country has its own inherent dangers. Consider the most common disasters in your area. The entire western coastline of the U.S. can get serious earthquakes, although many people discount earthquake insurance if they don't live in Southern California.

Look beyond simple flood insurance and consider whether your region has experienced (or is likely to experience) wind or electrical storms, tsunamis, hail damage, or wildfires.

Don't overlook man-made problems, too. Is the area suffering a high crime rate? Is your property isolated and therefore in danger of theft and burglary? Is there damaging wildlife in your neighborhood? Even a high percentage of dead or dying trees due to infestation can cause property damage if anything comes down on your home.

3. Ignoring Mold and Bacteria
Many insurance policies exclude much of the coverage for damage by mold, mildew, or bacteria. Mold and bacteria often grow unnoticed in hidden parts of the house or property, and they are a huge health risk to everyone. If the cause was covered by your insurance, there mediation may also be.

If it's not a covered cause, though, you could end up with an expensive cleanup effort that will be necessary before you can even sell the home.

4. Using Old Dollar Values
Do you know what changes in your life or family situation can affect your homeowner's policy's usefulness? Most people don't, so it's wise to do a regular evaluation with your insurance agent.

If you added assets of value (such as vehicles, technology, collectibles, or furnishings), you may need to increase the policy. Similarly, you may be under insured if you made major landscaping changes, got a pet, allowed adult kids to move back home, or bought a boat. In short, anything that changes the value of the property or increases the amount of risk involved in the property should be evaluated.

5. Covering for the Price
Property insurance is generally set for a specific dollar amount if something is damaged or destroyed. However, do you know which coverage value you actually need for your home? You can choose from the mortgage amount, the purchase price, or comparable real estate equivalents.

But most homeowners don't properly insure the home for the actual replacement cost. Replacement is more expensive than a purchase because it involves special construction issues, buying similar materials, and collateral costs of remodeling.

Does your coverage, for instance, pay for you to live somewhere while reconstructing the home? Does it cover the cost of fixing your neighbor's road after heavy equipment passes back and forth? Can you afford to replace your antique desk or fix original molding on a Victorian home? Consider the unique aspects of trying to rebuild, then meet with your agent to determine a more appropriate coverage amount.

Clearly, buying the right home insurance policy means working with an experienced agent and understanding all the factors that could affect your property. At Coast Comp Insurance Agency, we can help you find the perfect fit. Make an appointment today to learn more.