After it’s been stolen is bad time to find that your homeowners liability insurance doesn’t begin to cover replacing the expensive new laptop you just bought. The exclusions in your homeowners insurance can result in huge gaps in your coverage and leave you holding the bag for replacing stolen or damaged personal property.
The first thing you need to do is get out your policy and read it. You’re looking specifically for the section that covers homeowners liability insurance exclusions and limitations. It often comes as a real shock to many homeowners to learn that their homeowners insurance policy doesn’t cover flood damage or damage caused by a clogged sewer. Or that you’re only going to get a few hundred dollars to replace your expense home computer system.
By definition, a standard homeowners insurance policy limitation is “an exception to the general scope of coverage.” Limitations typical apply only in certain circumstances or for specified time periods. Homeowner liability insurance exclusions are much broader exceptions. For example, while your general policy may cover damage because of an act of negligence, the exclusion may exclude claims if the same damage was the result of an intentional act. Hey, lawyers don’t make the big bucks for making things crystal clear.
Once you understand what your homeowners insurance exclusions are, you can make an informed assessment of the types of supplemental, or optional, coverage you feel you need most. If you live in earthquake-prone California, for example, you may want to get additional earthquake coverage or make sure you’re insured against damage resulting from mudslides. If you live in the Midwest, additional coverage for flood damage. If you have a home office, your gear may not be adequately covered under the personal possessions terms of your homeowner policy. Typically, business equipment is capped at around $2,500 under the terms of most homeowner liability insurance policies.
Here’s another homeowner liability insurance exclusion to be aware of. Let’s say an expensive piece of artwork is damaged in a fire. If it wasn’t stolen and you can’t produce a police report, it may not be covered. If you have a lot of valuable art, antiques or jewelry, definitely consider a rider to cover any type of loss. The cost of the insurance will be tied to the appraised value of the item.
Typically, your homeowner policy will exclude any business-related claims. For example, if your dog bites a delivery guy who’s bringing you a business package and the guy sues, you’re probably going to be liable unless you have additional home business liability insurance.