Your Family Home: What Your Insurance Does and Does Not Cover

Home insurance has become so standard that it can come as a shock to find out that insurance companies only invented it a mere 50 years ago when they figured that it made sense to offer a single, comprehensive policy to cover both liability and property. While your Newburgh NY insurance agents can offer you any of the various forms that have since evolved to meet the needs of owners of single family dwellings, over 80% of such policies in force today are of a form known in the industry as “HO3.” These policies cover just about everything except those specified as excluded, such as earthquakes and floods.  Even though there are exclusions, they are often called “all risk” coverage as any risk not listed as excluded is covered.

These standard comprehensive policies generally cover damage to structures and personal property due to smoke, fire, lightning, windstorms, riots, explosions, hail, ice, vehicles, aircraft, theft, vandalism, falling objects, weigh of ice or snow or sleet, frozen pipes, heating air conditioning, and other such systems. Injuries caused to persons by you, your family, or your property are also covered. Homeowners should be aware that the personal property is only covered for damage due to named perils.   

While these policies are comprehensive, they do exclude common perils: floods and earthquakes. Some policies also exclude neglect, general power failures, war damages, and intentional loss. Your Kingston NY insurance professionals are available to help you understand just what is or is not covered.

Anyone who reads the newspaper or follows TV news knows that in the US, damage caused by floods and earthquakes are common and even extensive. In fact, nearly 90% of the population lives in areas that are prone to earthquakes. In the 20^th century, damage by seismic activity was recorded in every single state in the country! 

While most people do not have to be convinced to buy insurance that protects against fire damage, those who live in flood-prone areas are actually more likely to experience losses from floods—up to 26 times more likely according to some estimates. Additional coverage can be purchased for these perils, and naturally premiums are significantly higher in flood-prone areas.

A simpler policy known as the HO1, or the Basic Form Homeowner Policy, costs less but is very seldom purchased, as your Monticello NY insurance agents can tell you. This policy provides homeowner coverage only for the 11 listed perils fire, lightning, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion riot or civil commotion, glass breakage, smoke, volcanic eruption, and personal liability. A broader form, the HO2 policy, known as a “named perils” policy, covers all of the above and six additional perils (including all 11 on the HO1).  It also includes living expenses should the insured dwelling be uninhabitable.