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Fox Around the House

Six questions for your insurance agent

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 (iStock)

Before you sign off on your homeowners policy, make sure you know what’s being covered. Many policies fail to cover basic disasters, while other may offer extras that you didn’t know about. Here are six key questions to ask an agent to make sure a policy is right for you.

Which disasters are covered?

The number one reason people cough up their monthly premiums is to ensure that their homes are protected against major catastrophes. But in the eyes of your insurance policy, not all disasters are created equally. Many people find out too  late that they weren’t covered for earthquake damage, hurricanes or floods, which are rarely covered by a standard policy. Before you sign up for a policy, make sure you know what’s going to be covered.

Does it cover pests?

It’s not just the big disasters than can ruin a home. Tiny pests are just as likely to wreak havoc, and unfortunately, these critters often aren’t covered by a standard homeowners insurance policy. Termites are one of the biggest threats for homeowners, which can secretly hollow out the home from within. Homeowners often fail to discover the damage until the problem is pretty extensive, which is when they also find out that their insurance doesn’t cover repairs to the home or extermination. Bed bugs, mice and other infestations also aren’t usually covered — insurance companies categorize these as “preventable problems” and say it’s a homeowner’s job to keep critters at bay. But if you’re willing to pay a little extra, you can usually buy extra coverage to protect yourself against pests.

Does it cover mold?

A rampant mold infestation can be a disgusting discovery that requires an expensive clean up. Unfortunately most homeowners policies don’t cover this problem. For the most part, insurance companies treat mold problems the same way they treat pests: a preventable problem that can be fixed with a little day-to-day maintenance. For instance, if you failed to fix a leaky sink, which caused mold to flourish, then you’re most likely out of luck. But there are some instances where you may be covered with a standard policy. If a sewage backup causes you basement to flood, your insurance might pick up the bill for the water damage and subsequent mold removal.

Does the policy include liability insurance?

A good insurance policy doesn’t just cover your home, it also protects your if someone gets injured while on your property. If a delivery guy slips and falls on your icy front steps, or a tree limb comes crashing down onto a neighbor’s roof, you can be held liable. That’s why it’s important to ask about liability insurance when deciding on a policy.

What’s my rebuilding cost?

When buying homeowners insurance, many people make the mistake of getting too little insurance to cover the home. There can be a big difference between what your home is currently worth, and what it would cost to completely rebuild it. To start with, you need to know what your rebuilding cost will be, and most insurance agents will help you do the calculations to figure that out. Once you have that sum, you’ll need to figure out how much insurance you can afford. The most expensive insurance will offer you 100 percent coverage, but some homeowners might prefer to chance it and only cover 80 or 90 percent of the rebuilding costs.

Who picks up the tab if I need to live elsewhere while the home is damaged or destroyed?

The money to rebuild is only one part of the cost when disaster strikes. If a fire or flood forces you from your home, you could end up spending thousands of dollars on hotel bills and restaurants while the place is being rebuilt. However, many policies will cover some or all of these costs, which in insurance terms often appear under the headings “additional living expenses” or “loss of use costs.” While you might be covered for these expenses, there are often limits on these costs. The insurance company might only offer coverage for a certain number of days, or cap the total amount, which means you can be on the hook if the rebuilding process drags on and on. So make sure to ask about any restrictions on the additional living expenses.