Whether you are an established homeowner or buying your first home, you already know that having a solid homeowner insurance policy is an important puzzle. But do you know what is NOT covered by your homeowners insurance? Most do not. So this article is designed to introduce you to several non-covered articles (called "exceptions" in the language of insurance) that seem to be the most common claims problems.
I have also included possible solutions to these exceptions, such as a recommendation that allows you to "buy back" coverage. And if you want to know, I draw these exceptions from the most common home insurance policy – HO 0003 (edition 04-91
Since homeowners' insurance includes sections for both property and liability protection, it makes sense that there should also be exceptions for both sections. We start with exclusions of properties.
Exclusion of Property 1- Earthquake
Earthquake does not just mean an earthquake. It can include landslides, volcanic eruptions, sinking soil and even mining. Side note: mine deposition can be a problem in Ohio because many cities were built over old coal mines and these mines could collapse. Mining is an available approval for some counties in Ohio.
Many insurance companies offer earthquake insurance, but depending on where you live, you may need to purchase a separate earthquake policy. In Ohio, earthquake approval is standard. Most earthquake recommendations have a 2% or 5% deductible. The deductible percentage often throws people off – it's usually based on a percentage of the house amount. In this example, if you have $ 200,000 for your house, with $ 150,000 for the contents and the deductible is 5%, your deductible is $ 10,000.
Property Exclusion 2- Flood
The water that flows over its shores or ponds and rushes everywhere is a classic flood example. Did you know, however, that surface water runoff is also considered flooding? An example could be heavy rain that rushes over the ground and drains into a basement. We have seen many of these surface water runoff situations.
Even if you can not buy back flood coverage in a homeowners insurance, you can buy a flood insurance. We do not write flood policies (because we just do not have the demand), but you can learn more about flood insurance through FEMA and the National Flood Insurance Program.
Exclusion of properties 3- Water separation of drains, sewers or pumps
You come home one day, go into the basement and the first thing you notice is the SMELL! Upon further investigation, you will discover that your floor drain has been backed up in your basement (with wastewater). These are the most common water requirements we have and they can be really nasty.
Fortunately, there is coverage for backing up water through approval on most homeowners insurance policies. Premium is quite minimal and provides coverage for both the damage caused and its subsequent repair and decontamination (up to the selected limit). In these situations, we recommend a place like ServiceMaster or ServPro professionals who know exactly how to purify water and prevent mold, mildew, etc. committed:
(1) By or in the direction of an "insured"; and
(2) Intended to cause a loss.
A good example of this is arson. If you light a fire in your own house, the insurance company will not pay for the damage. Yes, an unintentional fire is covered, but not one that you deliberately set yourself up with the intention of collecting insurance revenue. This also explains why certain fire requirements may seem to take a while – the insurance company must first examine all fires to determine the cause.
Exclusion of liability 1 – Occurs through or in connection with a company operated by an insured
The simple reason for this exception? Because there are business liability policies, you can buy instead that are designed to protect your business properly. Some companies may offer a home-based business recommendation depending on the type of business you have (not all companies would qualify). But for many companies, a business liability policy (also called commercial general liability) is the only way to go.
Exclusion of liability 2- Motor vehicles
Similar to the example above for business liability, the reason why motor vehicles are excluded is that there are policies for motor vehicles (think car, motorcycle, motorhome, etc. There are some exceptions to this exclusion, so it is your repurchase I have listed them below.
(1) A trailer which is not towed or transported on a motorized land transport.
(2) A motor vehicle intended for recreational use off public roads, not subject to registration of motor vehicles and:
(a) Not owned by an "insured", or
(b) Owned by an "insured" and in an "insured place";
(3) A motorized golf cart when used for gambling golf on a golf course;
(4) A vehicle or transport that is not subject to engine registration which is:
(a) Used to service an "insured" home:
(b) Designed to assist disabled, or
(c) In death custody of an "insured place "
This can be a bit tricky depending on state laws, so if you are unsure, CONTACT your insurance agent to see if your motor vehicle meets the exceptions to this exemption.
Exclusion of liability 3- Watercraft
Like the exclusion of motor vehicles discussed above, personal watercraft are also excluded for similar reasons (personal watercraft policies exist and are often a much better option). There are certain situations where the exclusion does not apply. Due to the length of the exceptions, I will not list the policy language. Instead, below I have listed some features of the jet ski that will help you determine if your jet ski can qualify for an exemption from this waiver. AGAIN, if you have questions about your specific jet ski, CONTACT your insurance agent for the correct answer.
1) Horsepower for personal watercraft – for example, the exclusion states that 25 HP is the maximum for a watercraft that is owned. Some companies may allow 50 HP to be covered by home insurance.
2) Type of motor outboard versus inboard against inboard outdrive
3) Length of jet ski foot 25 is seen a lot in the exclusion.
So it seems that engine type and horsepower along with the length help determine if you get any liability protection under the homeowner's insurance or if you need a separate water shot insurance. When in doubt, ask your agent!
Do you know what your homeowners' insurance in Ohio covers? Or not? We are happy to review your current insurance. Call us at (937) 592-4871 or fill out the form below.