Floods, Earthquakes & Theft: Does Your Homeowners Insurance Cover These?

Ignoring homeowners insurance completely is one thing, having protection and still being denied coverage is another. Even those who bundle plans such as home and auto insurance together might still only have limited coverage. Loretta Worters, vice president of the Insurance Information Institute, stated that almost 98 percent of U.S. homeowners have a standard insurance policy, which is the bare minimum required in a mortgage agreement.

Organizations that offer members bonus coverage and other benefits with insurance policies is one way to make sure you have more than just limited coverage. AARP, for example, offers the "100% Protection Plan" that pays the full price for any damage done to your home. If this is a likely option for you, make sure the plan covers the types of damage that most likely threaten your home.

Here is what a standard policy does, and more importantly, does not cover on your home after deductibles are paid.

What Isn't Covered

Floods

The National Flood Insurance Program allows homeowners to purchase flood coverage separate from a standard insurance policy. This coverage protects the external parts of a home for up to $250,000, and the contents in a home up to $100,000. Other flood insurance policies are available on the regular market as well.

Of all the homes in flood-prone areas throughout the nation, only about 12 percent have flood insurance. Worters feels that every homeowner, no matter where they reside, should purchase flood insurance, because floods can happen anywhere.

Earthquakes

Just as with flood insurance, California residents neglect getting earthquake coverage, despite their location. Residents of other states should be cautious as well. In 2010, a 7.2 magnitude earthquake shook Baja California and was felt throughout southern Arizona.

Rodents and Termites

It may be hard to believe, but bugs and rodents cause a lot of damage. Exterminators and trappers for raccoons, skunks or any other varmints will not be covered. If you choose not to purchase coverage, it's wise to regularly get your housed sprayed and checked to prevent pests and bugs.

What is Covered

Roof Damage From a Storm

Roof damage from a hail storm is covered under a standard policy. The amount of payment will depend on the size of the hail and damage done to the roof during the storm.

Liability Coverage

If someone is injured on your property, he is not necessarily going to sue you. Even without a suit being filed, this coverage will pay the medical bills for the injured person.

Should someone be injured while on your property and he or she does sue, it will be covered under a standard policy. The common limit is $1 million. However, you can always purchase more coverage if you wish. If and when a suit is filed, your insurance will pay for your attorney, as long as you are being sued over something that is covered on your policy.

Fire, Vandalism, and Theft

Your home will be covered in the event of vandalism, fire or theft. In addition, any other structures on your property are covered as well. This includes sidewalks, fences, driveways, trees, plants and your garage.

Your personal belongings are considered as part of your fire or theft claim. However, if you have expensive items, such as art, jewelry, or collectibles, consider insuring them separately for their individual values.

Some Aspects of a Hurricane

Though standard insurance might cover you against wind damage from a hurricane, it usually doesn't cover damages due to a storm surge or flood.

Most people invest enormous amounts of money in homes and the possessions within. Having standard coverage is a great start, but depending on your location or your living circumstances, be aware of what you could lose.