Homeowner’s insurance coverage constitutes fundamental financial protection for many families because the family home is often their most valuable asset. While your homeowner’s policy can provide indispensable financial protections to cover certain types of property damage and perils, many policies have a wide range of expenses that you might be surprised to learn are not covered. As a Florida insurance claims attorney, my office frequently hears from policyholders who are shocked to learn that they will not be compensated for certain costs after disaster strikes. Unanticipated deductibles, earthquakes and floods may all cause unexpected expenses. A survey conducted by MetLife and published in an article by U.S. News and World Report reveals many homeowners are unaware of the gaps in their insurance coverage.
The U.S News and World Report story provided a graphic example of the potential impact of these unanticipated costs. A couple purchased their dream home only to have the home destroyed by fire when a lamp overheated. Portions of the couple’s home were destroyed.
While these losses would be stressful for most homeowners, the situation got much worse. The insurance company hired a contractor to repair the inside of the property. The contractor botched the job and caused a flood in the basement of the home. The moisture from the flood caused an infestation of black mold. The insurance company than offered less than the cost of repair to remediate the damage. The couple was distraught and could not sleep because of the overwhelming stress, which wore on them physically and mentally.
This story is by no means unique, so we have provided answers to questions about common coverage gaps:
If my home floods because my sump pump backs up will the damage be covered?
While most people think that their standard homeowner’s policy covers this type of accident, this loss usually is not covered unless the homeowner purchases special insurance.
Will my insurer rebuild my home if it is destroyed in a fire?
While fire is a covered peril, there is a good chance you will receive less than you need to rebuild. Many policies cap coverage, so you might not have enough coverage to cover the entire cost to rebuild. Even if you do not have an issue with the policy limit, the insurance company typically will offer an amount that includes a deduction for depreciation. The survey by MetLife found that one in three homeowners did not know how much coverage they had for their home. Half of those who responded did not know how much coverage they had for personal property inside the home. If you are a homeowner, it is important to confirm you have sufficient coverage limits for your home and personal property, as well as any policy limits or other deductions that will be made that might impact your ability to rebuild.
Will my claim be covered under a standard homeowner’s policy if building codes or other laws change, requiring me to rebuild undamaged portions of my home?
Although the MetLife survey indicated that two-thirds of policyholders believed this would be covered, this is an incorrect assumption. Portions of your home that are not damaged by a covered peril will not generally be upgraded unless you have purchased separate ordinance or law coverage.
Does a standard homeowner’s policy reimburse policyholders for earthquake damage?
Although a third or all policyholders surveyed by MetLife thought their homeowner’s insurance did cover this risk, this type of damage will not be covered unless you purchase special earthquake coverage.
Do you need to pay two deductibles for damage to your home and car if you have both insured through the same carrier?
If your home and car are both damaged in a severe winds storm because a tree falls on part of your house and your car, for example, you might be required to pay a separate deductible for both your home and vehicle. However, some insurance companies waive the second deductible.
The important takeaway from this blog post is that policyholders need to have a clear idea about potential gaps in their coverage before a catastrophe. In most cases, an insured can purchase supplemental coverage which allows a homeowner to customize coverage to fill appropriate coverage gaps. If you have suffered damage to your home that your insurance company refuses to cover, we may be able to help. My law firm represents policyholders in claims disputes in Miami and throughout Florida and we have obtain significant results for our clients. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.