Many homeowners are not precisely aware of what is covered by their insurance policy. Before you sign the dotted line, be sure to go through the fine print to determine exactly what is excluded in your homeowners' insurance policy.
Misconceptions about your standard policy could result in you paying out of pocket for damage to your home or belongings or for injuries inside your property. To help you better protect your financial interests, this article will shed light on common misconceptions about homeowners' insurance and give you advice on how to improve your cover.
Workers I hire are fully covered if injured on my property
Understanding the type of worker who is covered under your insurance property can be tricky. A standard policy only covers part-time workers such as pet sitters, baby sitters or your housekeeper, as they are usually not covered by workers' compensation insurance.
However, contractors you hire - such as plumbers, roofers or electricians- will typically not be covered under homeowners' insurance, as such professionals are already required to have workers' compensation coverage that covers them for any injuries sustained in their line of work.
Homeowners with full-time help living and working in their property, such as a nanny or caretaker, should consider taking up their own workers' compensation insurance, as standard homeowners insurance will not cover injuries to such workers.
All my valuables are covered in case of burglary
Most homeowners take up standard homeowners insurance, thinking that it covers all their belongings. The truth is while your standard policy will cover belongings such as furniture, clothes and appliances, it only provides limited cover for valuables such as art, jewelry and silverware. The policy has a specific cap on how much you will be compensated for in case such valuables are lost in a burglary.
If you have valuable items worth more than your policy covers, talk to your insurance agent about purchasing a broader policy offering additional coverage that would protect all your valuables.
Issues related to lack of maintenance are covered
What most homeowners don't realize is that their standard insurance policy only covers damage caused by perils such as theft, lightning, wind and hail. The responsibility to keep their homes well maintained falls squarely on homeowners themselves, so homeowners' insurance excludes protection against any damage deemed to have resulted from poor maintenance.
Damage caused by leaking taps, condensation, mold or basement flooding is deemed to be a result of poor home maintenance, and is therefore not covered.