5 common gaps in homeowners insurance

Published May 17, 2017
Homeowners Family.jpg 

Personal Insurance Account Executive

If you're buying a home, it goes without saying that you'll need homeowners insurance. And if the home you're buying is on the SouthCoast of Massachusetts or in Rhode Island, there's a good chance you'll be required to purchase flood insurance, as well.

But what about insurance that isn't required by your mortgage-holder or the federal government? Are there other protections you really should have, even though they're not mandatory?

As noted by the Insurance Information Institute, "You need enough insurance to cover the following: 

  • the structure of your home.
  • your personal possessions.
  • the cost of additional living expenses if your home is damaged and you have to live elsewhere during the repairs.
  • your liability to others."

A basic homeowners policy covers you — at least to some extent — in each of those areas, but a basic policy may leave you under-covered.

Here are five common coverage gaps in homeowners insurance:

  1. Damage caused by water. Even if your new home isn't in a designated flood zone, you should protect yourself with flood insurance. Standard homeowners policies don’t cover flood damage, and more than 20 percent of flood claims come from properties outside high-risk zones. With residential flood claims averaging around $40,000, flood insurance goes a long way toward recovering from a loss. Other uncovered losses under a standard homeowners policy includes water damage from sewer backup or sump pump failure. An endorsement, or "rider," added to your basic policy would close that gap in coverage of the structure of your home and your personal possessions.
  2. Contents of the home. Don't count on the insurance carrier to simply cut you a check for the amount on your policy's Declarations Page in the event your home and personal possessions are destroyed. In the event of a loss, the burden is on the policy holder to provide proof to the carrier that the lost or destroyed items were in the home at the time of the loss. Keep an itemized list of the home's contents, along with any receipts you have. Take photos. Walk through the house and shoot video of its contents. Document, document, document!
  3. Valuable items. Again, policies have limits. Under a standard homeowners policy, valuable items are covered to set limits and, even then, some only in cases of theft – jewelry and furs, for example, for up to $1,500; silverware for up to $2,500. To cover the full value of such personal possessions, it's necessary to "schedule" them – to itemize them on your homeowners policy, with each item assigned a value based on a receipt or appraisal.
  4. Business operated out of the home. According to the Small Business Adminstration, more than half of American businesses operate out of the owner's home. If you own such a business, don't assume your equipment and employees or customers visiting you at home are covered by your homeowners policy. A rider to the policy can cover some equipment and provide limited liability exposure, but your better option is a business owner's policy (BOP).
  5. Extra liability. Homeowners policies provide limited liability coverage, but to protect yourself against a lawsuit that could cost you your home or business, you need extra liability insurance, better known as an umbrella policyUmbrella policies pick up where homeowners coverage leaves off if someone is injured on your property or you cause damage to someone else's property. In addition, an umbrella covers you beyond the limits of your auto policy if you're sued for damages from an accident. Umbrella policies also can help cover legal fees, libel and slander.

Here's a bonus to the list: Check to see if your homeowners policy covers identity theft. Again, from the Insurance Information Institute:

Some companies now include coverage for identity theft as part of their homeowners insurance policy. Check your policy to find out. Others sell it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy which can run about $25-$50 annually. Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. It generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). Some companies also offer restoration or resolution services that will guide you through the process of recovering your identity.

No one likes buying insurance. But an interesting thing happens when you put together a program that provides all the coverage you need: Along with that insurance comes peace of mind — a sense of security from knowing you've protected the people and possessions that matter to you most.

I hope you find the above list helpful. If you're buying a home or would like to review your current policy, I'd be more than happy to talk with you. We'll make sure you have the coverage you need and the peace of mind that comes with it.


About Matthew Boyle and Sylvia Group

Matt Boyle higher rez.jpgA licensed insurance producer and Certified Insurance Service Representative (CISR), Matthew Boyle is passionate about informing and educating his clients on the coverage they should consider and the products they ultimately purchase. Whether the need is boat or watercraft insurance, homeowners insurance, auto insurance or specialized coverage, he’s committed to designing customized programs that protect his clients and their assets. Matt appreciates meeting and working with new people on a regular basis, and with 15 years’ experience in personal insurance, the last eight as a successful sales executive, he enjoys sharing his expertise. As an independent agent working with the accomplished team at Sylvia Group, he’s able to offer clients options and resources unavailable through most other agencies and direct sellers.

Sylvia Group helps businesses and individuals protect their future by designing customized insurance, benefits and financial planning programs. A locally owned agency known for its commitment to its clients and the SouthCoast community, as well for its industry expertise. Founded in New Bedford, MA, in 1950, headquartered in neighboring Dartmouth, and serving businesses and individuals throughout Massachusetts, Rhode Island and beyond, Sylvia Group is certified as a Woman Owned Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence. 

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