Check for Gaps in Your Homeowner's Insurance

As a homeowner there are many difficult decisions to make and a lot of upkeep. It is, after all, most likely your most valuable asset. One of the most difficult decisions about your home is insurance coverage. Homeowner's Insurance is a tricky business and like other insurance companies, they will try to pull the wool over your eyes. So many homeowners have such huge gaps in their insurance that government task forces have been created to identify the problems.

If you haven't taken a close look at your homeowner's insurance, now is the time to do so. You have to recognize what exactly is covered and what isn't. There are many fallacies and generally accepted ideas about coverage that simply are not true. If you have a local agent, it is time to meet with them and discuss the gaps in your policy because the worst time to discover a gap is after the fact.

Some of the things to watch for include the following, many recommended by the Hahn Agency at http://hahnline.com:

Make sure your deductible is affordable to you. If it's not, what is the point in having the insurance except that it may be a requirement of your mortgage.

Check to make sure what cost is covered. Is it the actual cost or the replacement cost? If it is actual cost, you may be in trouble if your home has depreciated significantly. Your insurance will only compensate for the actual cost and guess who makes up the difference-you.

Check to see that you have an Ordinance and Law expense. Some local municipalities require extra work to make sure your home is up to code. Some insurance policies may cover the replacement cost, but not the tear-down cost for out-of-code and older construction.

Coverage for sewer and drain backup. If you house valuables or assets of any kind in your basement or cellar, this is extremely important. If you do have the coverage, make sure that it will cover the value of what you are keeping there.

Along the same lines is flood insurance. Flood insurance is not normally covered by homeowner's insurance. It is a separate policy.

Limits of Liability. Make sure nothing you keep in your home or on your property is excluded from your policy. Take an inventory of all your asset, possessions, and especially valuables and make sure they are either off-site in a safe-deposit box, or your policy will cover the full value.

Limits on other structures. If you have a large garage, barn, or unusual pieces of construction on your property, they may not be covered by your policy.

Personal Liability. If you rent out your garage or a portion of your home, this portion not inhabited by you may not be covered. This is usually an easy and low cost addition.

By checking on these items and reviewing your policy every 12-18 months with your agent, you will better protect yourself in the event of disaster. These gaps are so common, it is almost assured that you will slip through at least one of them unless you act now.