My Homeowners Policy Covers Everything, Right?

A Homeowners insurance policy, with all its coverages and available endorsements, is an almost all-encompassing contract. But, it does not cover "everything". It does provide both property and liability coverages in the same policy. Simply stated, a policy provides coverage for your dwelling, your possessions and your legal responsibility for damages to others.

The property coverage in most homeowners policies is "all risk" meaning the policy covers all risks of direct physical loss unless otherwise excluded. Liability coverage is similar as it is written to cover your legal responsibility for injury or damage to property of others arising out of your negligence--unless otherwise excluded. The key to understanding the coverages, therefore, is to carefully review the policy exclusions. Exclusions generally fall into one of three categories:

Better Insured On A Separate Policy An example is a flood policy. Flood underwriting makes use of flood plains and the facilities of the National Flood Program and so flood is almost always excluded from homeowners policies with the intent that if the insured has a flood exposure, they will buy a separate flood policy.

Not Insurable Some types of property and causes of loss are not insurable. An example is intentional acts. If an insurance policy covered intentional acts, then a person could burn up their house anytime they wanted a new one. An example of uninsurable property is contraband which would be against public policy to insure.

Not Within The Company's Underwriting Appetite An example is an exclusion for jewelry items valued over $ 500. Another company who is more comfortable insuring unscheduled jewelry might allow up to $5,000 instead of $500.

In summary, your homeowners policy does not cover everything. You must review the terms, conditions, coverages, and limitations carefully to determine the extent of coverage. We also urge you to contact us with any questions you may have about homeowners insurance.