The Wall Street Journal recently featured an article on insurance issues for homeowners. It seems that not all policies are created equal and you may not have the coverage you might have had several years ago.
Having an interest in numerous rental investments in addition to our personal residence, I felt the need to check in with Keith Griffin of Griffin Insurance one of the agents that writes a lot of our residential coverage. Keith indicated that, generally speaking, when it comes to homeowner and dwelling fire policies, the insurance companies’ position is: “If the claim is sudden and accidental, it would be covered.” Insurance companies policies are written to exclude home maintenance type issues. If there is a long time water leak that creates rot, for example, it is not covered.
It’s important to use a quality company, such as Auto-Owners Insurance Companies, which are still writing the policies on an ISO form. The official product is an HO-3 for the homeowner and DP-3 for the dwelling fire. The non-standard type policies have more exclusions and are written on a different policy form. The differences include lack of replacement costs coverage, water damage caps or exclusions, and liability limitations.
You can also check sources such as JD Power & Associates and Consumer Reports who rank companies based their claim handling, or the easiest way to navigate thru the potential pitfalls is to just have a reputable insurance agent working for you. If you are being pitched a policy with inexpensive premiums make sure to check the HO/DP number.
Photo Credit: AlanCleaver_2000 (Flickr)