Frequently Asked Questions on Homeowner Insurance
Written by Tina Phu, Yun Yang   


1. How long should it take for my insurance company to pay a claim?
This depends on your state’s laws. However, your insurance company is responsible for acknowledging your claim within a certain time frame, such as 15 days, investigating your claim properly, and making a good faith attempt to process a prompt, fair, and equitable settlement of claims in which liability is reasonably clear. Your insurance company also cannot deny a claim without a valid reason. If you feel that your insurance company’s claims agent isn’t handling your claims properly or is violating your state’s regulations, talk to that person’s supervisor. If you’re not satisfied, file a complaint with your state’s insurance department, and if the insurance department gets enough claims, it will conduct an investigation.

2. What is a peril?
A peril is a condition that can cause a loss such as fire, theft, and windstorm.

3. When my child goes away for college, how will my policy be affected?
If your child lives on campus or in university-owned housing, your child’s possessions will be protected under your policy. Check your policy for limitations. If your child lives off campus, he/she may need to purchase renters insurance.

4. I own and live in an apartment and my bathtub overflowed and the water damaged the ceiling of the apartment/condo below me. Will my insurance cover this?
This depends on the circumstances. Your neighbor’s insurance may cover the damage, or the damage may be covered by a “master” insurance policy that includes all of the units in the complex. However, if your neighbor’s insurance provider insists that you were negligent and that you are responsible, you will have to turn to your insurance company. If you own your apartment/condo, your insurance provider should at least pay for a portion of your neighbor’s loss.

5. If my neighbor’s trees falls on my property and causes damage, who will cover the damage?
Since it’s damage done to your property, your insurance company will cover this. File a claim with your company. However, if you noticed that your neighbor’s tree looked like it was going to fall on your property, and you notify your neighbor of this hazard and ask him to do something about it, and he ignores this and the trees falls and does damage to your property, you may have recourse against your neighbor’s insurer. This is because your neighbor is notified of this hazard and chose to do nothing about it. Make sure you keep records of all correspondences and actions regarding this event.

6. Will my insurance company cover my diamond ring?
Check with your policy. Your ring will probably be covered by your policy to some extent for loss due to theft. If your ring’s value exceeds that value of your homeowners/renters policy, you can either purchase a floater which will provide you with a specific amount of coverage for you ring based on its appraised value or a stand-alone policy that protects valuable items.

7. What happens if I rent out my home?
A standard homeowners policy isn’t suitable for a rental property because you don’t need to insure the contents of the house, unless you provide furnishings, you need to worry more about liability issues, and you need to protect yourself against the loss of rental income. Insurance companies may offer insurance policies specifically for rental properties. However, policies and coverage differs from one company to the next. The best thing to do is to shop for a policy that provides complete coverage.

8. I don’t live near water—do I need flood insurance?
You should at least consider flood insurance. Storms, inadequate drainage, melting snow, and hurricanes can cause serious flooding even if you don’t live near water. Your homeowners insurance will not cover flood damage. If you are eligible for flood insurance, you will have to purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP). The average flood insurance policy costs $300 per year. If you live in a lower risk area, you can purchase less coverage.

9. What if my home is a historic home?
An HO-8 homeowners insurance policy is designed to cover older homes. This policy covers the costs of standard repairs, but does not provide replacement cost coverage. If your home is truly historic and you want to insure it as completely as possible, seek out an insurance company that specializes in insurance for historic homes.

10. Should I buy insurance for my home while it’s under construction?
Yes, you should. A standard homeowners insurance policy will cover damages done to your home due to fire, theft, or other events. It will also provide liability coverage in case your friend is injured when you’re leading a tour of your home. Your can also purchase a “fire and dwelling policy,” which covers damage to the physical structure, but not theft. Once construction of your home is complete, you can add on additional coverage or re-evaluate your coverage.

11. Will my roommate’s renters insurance cover my policy?
This depends on your state’s laws and your policy. Insurers recommend that you and your roommates each purchase your own separate policy. Your insurance company may allow you and your roommates to purchase one policy for all of you. Each person’s name should be listed under the policy, and be sure to purchase enough insurance to cover all your possessions.

12. What does property damage cover?
The property damage portion of a homeowner's policy covers loss or damage to the home and other structures on the property. In the event of a total loss, the amount paid depends upon the dwelling policy limit of the insurance contract as well as the type of coverage provided under the contract.

13. Some of my personal items were stolen from my hotel room. Would they be covered under my policy?
Maybe. Most people don't know that their contents coverage usually includes loss or damage to personal property, regardless of where it was at the time of the loss. You may then be covered under your homeowner's or renter's insurance in the event of theft of personal property while staying at a hotel. Such coverage is typically as much as 10% of the dwelling policy limit.

14. What is the difference between a dwelling policy and a homeowner’s policy?
A homeowner's policy is a package which covers loss not only to the dwelling structure, but other structures on the land, personal property contained in the dwelling, and liability to third parties who come onto the dwelling and surrounding land. A dwelling policy covers only the dwelling structure itself.

15. What do medical payments cover?
Medical payments pay the medical bills for people accidentally hurt in your home. It also pays for people hurt away from your home by you, your household members, or by your pets. Often, this coverage is provided no matter who is at fault for the injury. It is intended to cover the costs of minor injuries without the need for a third party to sue for reimbursement. Unlike the medical payments coverage in a personal auto insurance policy, a home medical payments coverage does not apply to injuries to you or to those who live with you. Nor does it cover injuries related to at-home business activities.

16. I can’t live in my home because of a fire. Will my policy cover the cost of room and board at a hotel or motel?
“Additional living expense” coverage (also called “loss-of-use”) is one of the most important features in a standard policy. This coverage picks up the tab for your hotel costs, restaurant bills, and other additional living expenses when your home is too damaged to live in during repairs.

17. Is there any limitation on the coverage of my valuable items?
For a standard homeowners insurance policy, coverage limits for jewelry, furs, watches, and related items is only $1,000 combined. These and other limits are in place to encourage home owners to buy additional insurance coverage for valuable and hard to replace items. If you have any of the items such as money, valuable papers and securities, boats, trailers, business use property, silverware, firearms, jewelry (including furs, watches, and related items) or are planning to purchase some in the future, it is important to check with your insurance agent for additional coverage.




Last Updated on Sunday, 26 December 2010 20:10