In the vast landscape of financial planning, few decisions hold as much significance as securing the right insurance coverage. Alexis Goines, a seasoned professional, stands out as an expert in insurance planning and can help with all your questions.
Question: After seeing flood and storm damage reports, I’m worried about my home insurance. Does it cover everything? What else do I need?
Answer: Emergencies, especially storms, can be unpredictable and cause personal injury and costly damage to homes. The right insurance is essential to help mitigate damage from storms and soften the financial blow that such destruction can cause. Not all insurance is the same. Additional coverages, riders and even policies may be necessary to help reduce the financial impact on homeowners in the event of a covered loss. Typically, flood insurance is offered as a separate stand-alone option, similar to earthquake insurance, however, these options can vary from company to company, so this is why it’s important to discuss with a professional you trust.
Homeowners’ insurance: Standard homeowners’ insurance is designed to offer financial protection from sudden and accidental loss. This is protection for your primary residence and covers damage from perils such as fires/smoke, windstorm/hail, theft, falling objects (i.e. trees), frozen pipes and water damage. It’s also important to consider the deductible (or out-of-pocket threshold) selected when the policy was set up, as the damage will need to exceed that value to warrant filing a claim.
You should also consider replacement cost coverage versus actual cash value. A replacement policy is designed to offer the ability to rebuild/repair with today’s value in materials/labor. This type of policy is highly recommended to ensure the highest coverage should you find yourself in a claims situation. Your specific home’s characteristics should be utilized to determine the total home value and discussed when you initially set up the policy. Be aware of your policy limits and know that the policy can only cover items that were damaged by a covered loss.
It’s not uncommon to run into issues where certain items cannot be matched and/or replaced, for example, color deterioration on siding can become an issue. This is why it is highly recommended to keep regular maintenance of the home and set aside funds to cover these types of unexpected situations as they arise.
Keep in mind, any water coming in from the ground is considered flood and would be excluded from a standard home policy.
Flood insurance: Flood insurance is most widely offered through FEMA. However, it can be purchased through private companies for select homes, based on location and value. These policies offer coverage for the home, as well as personal belongings, damaged by water coming in from the ground.
Some additional coverages to ask about/consider:
Water backup: Is typically excluded from a standard home policy, however, an endorsement that can be added. This ensures that should any water back up from the sewer/drain/sump pump system into your home, causing damage to flooring or personal property, you would have the necessary coverage to pay for repairs.
Building and codes: This could be a big concern! Especially with the topic in recent news. If you have not added this endorsement to your policy, it’s likely that any covered loss requiring additional work to be brought up to code would not be covered. Locally, this is a more common issue with roofs since the codes were last updated in 2019. Roof replacement requires some changes that may not be included with your policy agreement unless this coverage has been added. This endorsement applies to any code that has changed since your home was built or last upgrades/repairs made.
It’s also worth noting, homes are covered based on the occupancy and usage. Homeowner’s policy coverage would not apply for a rental or “flip” home, so disclosing the correct information can be key.
This can be a complicated topic, but you don’t have to navigate it on your own. For help with all of your insurance questions, reach out to Alexis Goines online or by calling 931-553-1969 to discuss your needs with her and her team of licensed professionals. They’re here to help you make the right decisions when it comes to protecting what’s most important to you!