The Answers to the Most Common “What If” Questions in Home Insurance
Many people think of insurance as a dull industry, and when buried in paperwork, even I can understand why. However, the truth is, insurance is all about drama. Every day, our agents deal with unique situations and scenarios, striving to protect against all the "what if" circumstances that arise. This month, we’ll delve into the most common “what if” scenarios we encounter in home insurance, with a focus on auto and business insurance next month.
Exploring Common "What If" Scenarios in Home Insurance
Insurance can be complex. Each situation is unique, policies vary, and coverage can differ even within the same insurance company. Here’s how some typical scenarios might be resolved:
1. What If a Hurricane Hits? How Much Will I Pay?
Check your policy for a “wind deductible.” This is often a percentage of your Dwelling coverage (Coverage A). Instead of writing a check, the insurance company typically deducts the deductible amount from your claim payout.
Some policies also have separate “Named Storm” and “Wind” deductibles, distinguishing between hurricane/tropical storms and other wind events like off-season storms or straight-line wind.
2. What If My Neighbor’s Insurance Premium Goes Down?
Insurance premiums depend on many factors beyond location, including your personal claims history, coverage options selected, personal credit, and differences in construction or design. If your neighbor's insurance goes down and you have the same company, your rates might decrease at renewal, too.
3. What If My House Loses Power and All My Food Spoils?
Food spoilage is an optional coverage on many home insurance policies, usually with limits of $500 or less. Coverage often depends on the cause of the power outage, which typically must be off-property.
4. What If I Have to Stay in a Hotel During a Remodel?
This coverage is triggered by an insured event that makes your property uninhabitable. Multiple coverages might come into effect, and there’s usually a limit on the dollar amount available. It’s up to you to allocate funds between housing and extra expenses like travel and dining.
5. What If My Toilet Overflows While I’m Out of Town?
Water damage coverage is increasingly limited. Your policy may include a maximum coverage limit for this type of damage, typically around $10,000. Some policies exclude water damage entirely.
6. What If My Neighbor’s Tree Falls on My House or Car, or a Neighbor Cuts Down a Tree that Falls onto My Shed?
Your car insurance may cover the damage, but you’ll likely pay your comprehensive deductible. Depending on the situation, your auto insurance may seek reimbursement from the neighbor’s property insurance.
7. What If My Dog Bites Someone?
Many home insurance policies offer liability coverage for dog bites. Typically, the person bitten sees a doctor, sends you the bill, and you forward it to your insurance company. You may pay a deductible, though often not. Coverage depends on the breed, as some are excluded.
8. What If a Contractor Working at My House Injures Themselves?
This likely falls under the contractor’s workers’ compensation insurance. It’s essential to get proof of this coverage before allowing work to begin, as otherwise, it may fall under your medical coverage, which is usually limited to $10,000 or less.
9. What If I Lose an Expensive Watch on Vacation?
Many home policies offer worldwide coverage for personal items. Expensive items like watches can be specifically listed on your policy. If not listed, a maximum limit (often $1,000 or less) may apply. Consider standalone jewelry or collectible insurance for better terms or lower deductibles.
10. What If My Rental Property Is Empty for More Than Three Months?
Most policies have a vacancy clause that limits coverage for things like vandalism, theft, spoilage, mold, and liability if the property is vacant for a certain period, often 90 days. A property manager’s periodic inspections may waive this clause.
11. What If I Start Renting Out My House?
This requires a different policy type. Your current policy will likely need to be canceled and a new one obtained that allows for rentals. If it’s a secondary home and friends or family stay at no charge, you might not need to change anything.
12. What If I Rent Out My Carriage House but Not the Main House?
The carriage house is usually included with the main dwelling on one policy. To rent it out, it may need to be removed from the homeowner’s policy and placed on a separate rental policy. If the main house is also rented out, disclose the number of families renting at any one time.
13. What If My Car Runs Into the House?
Policies often have clauses about insured vs. insured events. For example, if your spouse rear-ends you, coverage may be denied. However, for PR reasons, insurance companies might still cover the claim, resulting in two separate claims with two separate deductibles.
14. What If Squirrels Destroy My Roof or Bed Bugs Infest My Rental Property?
Unfortunately, these scenarios are typically not covered, as they fall under regular maintenance responsibilities.
Conclusion
Our experienced agents have handled all these scenarios. With decades of experience and knowledge, our agency, established in the 1980s, has weathered over 40 hurricane seasons and thousands of claims. We’re ready to answer your questions about current or potential policies.
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