How to Identify and Close Gaps in Homeowner's Insurance Coverage

Each night as I lay down to go to sleep, I used to rest comfortably knowing my home was insured. What I found out after a small late night fire is that we weren't covered as we thought we were. Avoid the devastation and unexpected expenses we faced by following these recommendations for closing gaps in your policy.

Identify Obvious Gaps in Your Policy

To begin, take inventory of your home. List every thing you would want to replace or be reimbursed for by your insurance company. Don't count on being able to grab certain things as you walk out the door, because in the panic and chaos of evacuation, your photos, laptop, and jewelry box generally don't come to mind until family is safely out of the house, and then it is too late.

Write a description of your home. How old is it? How long ago was the wiring/plumbing upgraded? How many stories is it? Is it wood or brick? How many square feet are heated/air conditioned? Do you have additional structures, such as storage buildings, garage apartments, RVs? Finished basements present special circumstances that often require additional coverage and expense. Certain pets require additional coverage as well, if they are considered dangerous or aggressive due to their breed.

Finally, talk to an insurance agent or do research to determine what coverages you might be missing. We found that the coverage we had would not cover our contents! When our dryer caught fire, we lost it along with new school clothes in the dryer, my church/court dresses, and an entire storage bucket of clothing that was on top of the dryer. The bucket and clothes melted. Additionally, we are required to add spacers to our breaker box to bring it up to code. These losses cost us $2,000, plus MUCH inconvenience and distress.

Other Common Gaps in Coverage

It is important to consider other common gaps in coverage, as well. Some of these shortfalls in coverage are not so obvious:
∙ Contents
∙ Flood insurance
∙ Water damage (sewer and drain backup)
∙ Code/Ordinance Upgrades (Cost to bring wiring or roofing up to code)
∙ Personal Injury (Slander/Libel, False Arrest, Defamation of Character)
∙ Additional Structures
∙ Income Property (Income brought in by rental of property)

To avoid heartache, inconvenience, and unplanned expenses, take care of gaps in coverage now, before you need the coverage you do not have. Read your policy. Check with your agent. Take the time to make sure you are covered adequately. Additional protections generally add little more than a few dollars to your policy, but the peace of mind is worth it.