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3 unexpected things you didn't know about home insurance

May 21, 2015

Having a home insurance policy in place is important to keep both you and your belongings covered in the event of theft or damage. And if you are a first-time homebuyer, you may not know that home insurance policies are not the same across the board, either in terms of cost or coverage.

Don't let disasters catch you unprepared.

Home insurance policies are tailored to homeowners' specific needs and situations. While this is beneficial for you because it will cover what you need covered, it also can bring a great many surprises. Since all policies vary, it is necessary that homeowners take a good look at their policies to ensure they are covered for what they need to be and avoid surprises along the way.

If you are purchasing homeowners insurance for the first time—or maybe just are in the habit of becoming more familiar with the many options available—then keep in mind the following unexpected things you might not know about home insurance:

1. Natural disasters aren't always covered

While many homeowners assume that a natural disaster is covered under a standard home insurance policy, this is not the case. For example, unfortunate events such as earthquakes and floods are not covered in home insurance policies and require their own coverage.

"Homeowners must know what's covered so they can be properly prepared.”

If you are living in an earthquake- or flood-prone area, then taking out a policy specific to those scenarios is worth looking into. You want your home to be protected at all costs, so there is no reason only covering it from certain incidents and not others. Earthquakes and floods can ruin your home and destroy your belongings. Don't be caught off guard by assuming those catastrophes are covered in your policy.

2. Required upgrades are not typically covered

There are times when a law or building codes change, which require you to update parts of your home even though they aren't damaged. There are some homeowners who assume their coverage should assist with these costs. However, this is not the case.

It is not common for home insurance policies to assist with upgrades. While you might think, “But this is out of my hands,” the costs are still going to be up to you. However, there are some additional policies with options for ordinance or law coverage, in which case upgrades necessary because of changing laws might be covered. Like all policies, this would vary depending on situation, but it is certainly worth looking into.

Make sure you know where you stand with flooding coverage.Make sure you know where you stand with flooding coverage.

3. Items can be covered outside the home

When you take out a home insurance policy, it is not only because you want to cover the structure of your home, but the items you own as well. This means your electronics, jewelry, furniture and other items you consider to be of value are all included in the policy. However, the coverage on these objects is not limited to the home.

For example, if you have jewelry you are wearing out for dinner and it is covered your home insurance policy, then theft of that jewelry would still be covered. This is a welcome surprise for many homeowners and is another reason to make sure all of your valuables are covered in your policy.

When taking out a home insurance policy, it is important to know what you are purchasing and what it will cover. There is nothing worse than receiving unexpected news pertaining to your policy after a natural disaster or other catastrophe. Make sure you are covered and choose the policy that is right for you and your way of life.