Common Home Insurance Gaps

As a responsible homeowner, you’re likely aware of the importance of home insurance. These policies can cast a robust and versatile financial safety net capable of addressing many common risks and perils involved in homeownership. However, all home insurance policies have certain limitations that may leave behind coverage gaps. Understanding these potential shortcomings and how to minimize their impact on your finances should be a top priority.

5 Possible Coverage Gaps You Cannot Afford to Overlook

When assessing and addressing your coverage needs, you should acquire and maintain a home insurance policy that suits your unique circumstances. Consider the following potential coverage gaps and how you might avoid being underinsured:

1. Natural disasters—Although some weather-related losses may be included in standard home insurance, certain natural disasters, including floods and earthquakes, are typically not covered. You’ll need to purchase separate policies or endorsements to help ensure you can manage losses arising from such incidents.
2. Valuable possessions—Most home insurance policies include limited coverage for your belongings. However, particularly valuable items, such as jewelry and fine art, may require additional protection, as the cost to replace, repair or restore them could quickly exhaust your policy’s limits. Consider purchasing an endorsement or scheduled property coverage for these items.
3. Home-based commercial operations—The digital era has enabled many homeowners to operate businesses from the comfort of their own homes. However, standard home insurance may not cover losses and damages related to your company. Explore riders or additional policies to avoid this coverage gap.
4. Sewer and water backups—Water and sewage backing up into your home can cause significant damage and expensive financial losses. Your home insurance may not include sufficient coverage for such incidents, potentially necessitating a water backup coverage endorsement.
5. Liabilities—Your home insurance may offer personal liability coverage, but you must ensure the policy’s limits are sufficient. Homeowners with greater liability risks, such as attractive nuisances (e.g., swimming pools, firepits and playground equipment) or certain breeds of dogs, may need to enhance their insurance portfolio to ensure financial security.

We’re Here to Help

Contact Insurance Solutions in Scottsburg, Indiana, today to identify and address home insurance coverage gaps and ensure you have the right policies.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.