5 Things that May be Missing from Your Home Insurance Policy

Plenty goes into making a house feel like a home, including everything from our possessions, pets, and of course our families. That is why it is important to ensure that everything that makes up your home is properly insured to protect you from any unexpected occurrences. 

Your home is as unique as you are, and your insurance coverage should reflect that! The coverage you receive should cover the specific needs and necessities that come with your home. If it doesn’t you might be shocked to discover that the insurance claim you are trying to file isn’t covered and you have to pay out of pocket.

At Berry Insurance, we are experts when it comes to properly insuring homes for thousands of clients. So don’t wait for a loss to find out if you are properly covered! There are still many areas that homeowners are surprised to learn are not covered within their home insurance policies. 

While insurance can be daunting, it doesn’t have to be! So we’re here to help you with 5 simple tips of areas that may be missing or inadequate with your own home insurance policies. 

1. A comprehensive tier

When it comes to protecting your home, your insurance policies should be comprehensive and thorough. 

Most insurance holders operate through different levels and tiers of coverage, with one being less comprehensive than the other. Typically we like to offer the best tier available because it will usually cover most if not all of what we want to see protected. This also tends to be more cost effective in the long run. 

Some agents will begin their policies at a lower tier of coverage and try to piece together the entire package as they go. This is not the best approach for home insurance, as there can often be areas of coverage neglected or entirely overlooked. 

When protecting the things we care about most, it doesn’t pay to skimp on certain areas as you’ll find that you will only get what you pay for. You want to make sure first and foremost that you have the right coverage at the most affordable price you can get, even if it’s not the cheapest offered. 

2. Adequate coverage limits

There are six types of coverage that make up your home insurance policy. Each of these sections have a coverage limit, which is the total amount the insurance carrier would pay out if you were to have a claim. Some carriers may write lower limits to save a couple bucks on the quote they offer you, but the truth is, those limits may not be enough to cover some of the most common home insurance claims. Below we will explain each section of coverage, and the limits you should have for each.

Dwelling: 

Dwelling coverage protects the structure of your home itself, protecting it from damages caused by a variety of factors. 

For dwelling, you do not get to choose your coverage limits. It will be automatically set based on the replacement value of your home.

Other structures: 

Other structures on a home insurance policy cover any damages sustained to structures not attached to your main dwelling. This includes everything from fences, garages, pools, driveways, and sheds. 

The coverage limit is typically set at either 10 or 20 percent of the value of your dwelling coverage, but if you have high-value other structures that exceed those limits, you can choose to buy more.

Personal property:

This area of coverage encompasses all of the things you own within your home and yard. Whether damaged or stolen, this area of coverage pays to repair or replace any of the items. 

This is another coverage limit that is automatically set by your insurance carrier, and is typically equal to 50 or 70 percent of dwelling coverage.

Loss of use: 

In the event of a disaster or emergency where you are unable to stay within your home, loss of use coverage will provide you with paid temporary lodging

The limit to this section is typically 20 or 40 percent of dwelling coverage.

Medical payments to others:

This section of the policy covers any medical expenses to anyone injured while on your property. This includes injury from falls, laceration, dog bites, and more. 

Typical coverage limits of this section are at a minimum of $5,000.

Personal liability: 

If you are ever sued for liability based upon someone being injured on your property, this section of the policy covers medical expenses as well as legal fees or settlements. 

This is where your coverage limits become very important, and where we often see policies fall short. When selecting coverage limits for personal liability, you can get anything from $100,000 - $1 million in coverage. We always recommend the high end of this range, because nowadays, you can be sued for almost anything and those lawsuits can be hundreds of thousands of dollars. In fact, many claims can even surpass that $1 million limit, which is why we recommend umbrella insurance to most folks.

3. Optional coverages

Some optional coverages can be important to your policy and may not be covered under the main types listed above. 

Personal injury: 

Separate from personal liability coverage, this optional coverage protects you in situations of libel, slander, or defamation lawsuits that may come your way. 

Sewer or water backup: 

Held at an additional cost, this insurance covers any overflow that involves backup within the plumbing system - resulting in pipe, drain, sewer line or sump pump backup and overflow. This is separate from standard overflow coverage, which protects from backups in toilets, sinks, and drains. 

Service line coverage: 

Also held under an additional cost, this optional coverage pays for any repairing of damaged pipes or wires coming into your property. This includes power lines, water pipes, or septic lines. 

Typical limits of this coverage set around $10,000 for service and $50,000 - 100,000 for equipment repair. 

Equipment breakdown coverage: 

This coverage pays for any damage done to your home systems (Central air conditioning, furnaces, etc.) through forces such as power surges, electrical shorts, mechanical breakdowns, motor burnout or operator error.

Scheduled Items:

This is a useful option to assure any of your valuable or important items are insured. By scheduling these items for a few extra bucks, valuable items such as jewelry, fine art or other treasures are fully covered if they were to ever be damaged or stolen. 

The advantage to scheduling items is that if there were a claim, there is no deductible applied, and also, covered losses will now include mysterious disappearance (for example, if you lose your engagement ring down the kitchen sink).

If you’re missing any of the coverages above on your policy, you could be stuck with a large out-of-pocket claim, so we recommend checking with your insurance agent to make sure you have these important coverages.

4. New additions or changes

Welcoming new improvements to your home can be a fun and exciting time, however it is always vital to review your insurance policies to ensure every new facet will be properly covered. 

Any new additions or renovations that greatly increase the value of your home is especially important when it comes to reviewing your home insurance policy. While your brand new kitchen cabinets surely look amazing, this focuses more on any additions to square footage on the property. If you’re increasing the square footage of your home, your dwelling limits will need to be increased accordingly.

Also, if you are making any major improvements to your outdoor space, such as adding a new swimming pool or patio area, your other structures limits will probably also need to be increased to cover the improvements. 

Reviewing any and all major changes made to your home can be a great way to update your current insurance policies, or look elsewhere if you feel you are not getting the proper level of service from your current insurance provider. 

5. Business from home

With such an influx of at home workers in recent years, it can be easy to assume business from home would be covered under your normal policy. However, this is not always the case with most home insurance plans. 

While simply completing office work at home in your PJ’s doesn’t require any further coverage, the growing trend of starting a business out of your home may merit a proper review of your policy. Whether selling homemade jewelry online or operating an in-home photography studio, certain business related risks may not always be covered under your standard home insurance policy. 

When speaking with your agent regarding any at home business ventures, they will determine whether yours is a “permitted incidental occupancy”. This would allow your home-based business to be eligible for limited liability and property coverages. If your business venture is not covered under this exception, you will have to instead acquire a full business insurance policy if you want to be properly protected. 

At home businesses can be a great cost effective way to get your foot in the door of numerous industries from the comfort of home, but it’s imperative to acquire all the necessary protections to make sure your business can thrive. 

The Next Step

It can be easy to feel overwhelmed when it comes to knowing how to best insure our homes, but we hope these tips will steer you in the right direction to get the best coverage you deserve.

If you still have questions regarding your coverage or simply want to know more, this would be a perfect time to further review home insurance policies. 

As we mentioned, we have been helping thousands of homeowners with their home insurance policies for the past century, so reach out to us today to discuss any of your current plans and if any areas are missing from your specific coverage.