- How Many Employees Do You Need For Group Health Insurance? | eHealth
- Insurance Ratings Explained with the Top Company Rankings – ValuePenguin
- Paying for COSENTYX | COSENTYX® (secukinumab)
- If I enroll in the exchange, will that coverage take effect immediately? | healthinsurance.org
- Coming soon: Individual and family annual renewal and discontinuation letters
Are you a homeowner? If so, you probably have insurance on your property. While it’s required if you have a mortgage, it’s optional if you’ve paid off your mortgage or bought the property in cash. Mortgage companies insist on insurance to protect themselves from financial loss in case the property gets damaged.
What Does Homeowners Insurance Cover?
In general, home insurance covers a wide range of issues, including flood and fire damage. It may also include liability coverage, which is essential if someone gets injured on your property and files a claim for medical expenses. It’s crucial to carefully read and understand your policy to know what exactly is covered.
The Most Common Home Insurance Claims
One of the most common claims in homeowners insurance is a broken pipe. If left undetected, it can cause severe water damage to your belongings and the structure of your home, resulting in a massive claim and months of repairs. Another common claim is related to fires that go out of control, causing damage not only from the flames but also from smoke. In such cases, you may have to remove affected furniture and belongings. It’s important to know the specifics of your policy to understand the coverage.
Your insurance policy may also cover temporary living arrangements while your home is under repair. Check the terms of your policy to find out if this is included.
Additionally, different regions may require specific additional insurance. For example, properties near the coast may need additional flood insurance for hurricanes, while earthquake-prone states require earthquake insurance to handle any related damage.
Are Insurance Policies Public Record?
In most cases, homeowners insurance policies are not public records. However, in some states, you can discover another person’s insurance company through public documents. If necessary, this information can be used to raise the possibility of a third-party claim directly with the company. For example, if you file a lawsuit against the property owner for an injury or damage caused by their property. Some states also require homeowners to register their insurance companies with the local tax office, making that aspect of the registry public.
Understanding the Parts of a Homeowners Policy
When you sign a contract with an insurance company for a homeowners policy, it should contain the following components:
- Statement of insured parties, property location, insurance amount, policy value, and property description.
- Coverage statement detailing the structures or features covered, the extent of coverage, and the types of coverage (liability vs. property).
- Exclusions statement outlining what is not covered by the insurance policy.
- Conditions statement stating the responsibilities of the owner and the insurance company, as well as the procedure for filing a claim and the company’s decision-making process.
- Recommendations that may affect the scope or cost of coverage.
Understanding Liability Coverage
Liability coverage comes into play if someone gets injured while on your property. In such cases, your insurance policy may cover their medical bills. However, if the injury is deemed to be a result of negligence or lack of maintenance, such as a floor rotting and causing the person to fall through a hole, you may be responsible for their medical expenses. In addition, you might end up paying higher insurance premiums in the future due to negligence.
Get a Hint!
As a homeowner, it’s important to be aware of a document called Comprehensive Loss Underwriting Track or Exchange (CLUE). Although it’s not a public document, it can impact the future sale or purchase of your home.
What is a CLUE Report?
A CLUE report is a record created by homeowners insurance companies and shared with other insurers. It keeps track of the claims you’ve made against your policy, including potential claims you’ve discussed with company representatives and claims that were denied.
Insurance companies use this record to set your insurance rate, even if you switch to a different company in the future. The CLUE report is typically kept on file for 5-7 years. While it’s a private document, it can be treated more like a public document if you give it to your real estate agent when trying to sell your property.
Why is the CLUE Report Important?
When you sell your home, prospective buyers may request a copy of your CLUE report to obtain information about any recent damage to the property. However, only you can provide this document, as your insurance company cannot disclose the information without your consent.
Before selling your home, it’s crucial to review your CLUE document to ensure accuracy and remove any harmful information that could deter potential buyers. A CLUE report may reveal instances where the insurance company attributes a claim to poor building maintenance. Prospective buyers may be concerned about maintenance issues and decide against purchasing the property based on this information.