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What Does Your Homeowners’ Insurance Cover?

If you are buying or remodeling your home, it is a good idea to make sure that the homeowners’ insurance policy you already have or are planning to buy has the coverage you need. Remember, your agent is your best source of information. Make sure you take the time to discuss your concerns and any questions you might have. Your premiums pay for the time your agent spends with you. Take advantage of every minute. Here are the questions you should ask:

  • Will this policy cover a direct loss due to fire, lightning, tornado, wind storm, hail, explosion, smoke, vandalism and theft?
  • What will happen if your house is totally destroyed by fire? Should my coverage be based on cost to rebuild or cost to replace?
  • Is our home in a flood area? If so, how do I purchase flood insurance?
  • Will this policy cover water damage from a burst pipe?
  • Will this policy cover water seepage from ground water?
  • Do I need to buy an additional homeowners’ policy for earthquakes? Are we in an earthquake zone?
  • Does this policy include liability protection if someone is injured on my property? What are the circumstances and the extent of the coverage?
  • Does the policy cover damage from trees that fall during a storm? What about removal of damaged trees after a storm but have not damaged my property?
  • If my power goes out due to a storm, will this policy cover spoilage in my refrigerator or freezer?
  • Does my policy cover items stolen from my car?
  • Does my policy cover rebuilding requirements set by town ordinances or laws for disasters? (This is especially applicable at the shore and in flood plain areas.)
  • Does this policy cover disasters often termed “Acts of God?” If so, what are considered “Acts of God?”
  • Is my coverage based on Actual Cash Value or replacement cost?

If you have questions about your insurance, you can contact the National Insurance Consumer Helpline. Here are three ways to reach them:

Insurance Information Institute
110 William Street
New York, NY 10038
(212) 669-9200

Source: United States Office of Consumer Affairs