Homeowner’s Insurance: 7 Coverages You Need

Homeowner’s insurance: Do you have the right kind? Does it cover the theft or loss of your jewelry? What about the increased cost of building materials you may need for repairs? If you have to stay in a hotel because of a flood or fire, who pays for that?

Homeowner’s insurance policies typically cover damage to a residence, loss or theft of possessions, and personal liability. But there are many additional coverages you can add to protect your assets. These homeowner’s insurance coverages may not be included in your original policy.

Here are seven additional homeowner’s insurance coverages that you may need.

Ordinance of Law Exclusion: Let’s say your home is damaged and repairing or replacing your property has to be done with upgraded materials to conform to building codes. A standard homeowner’s insurance policy may cover only the cost of replacing or repairing damage with the original grade of materials. Ordinance of Law Exclusion – also called Building Code Coverage – covers the difference in cost between the old materials and the new materials.

Additional Coverages: Is your jewelry covered? Your artwork? Musical instruments? Golf clubs? Unless you have additional coverages in your homeowner’s insurance policy, you may not be covered for those losses.

Liability Insurance: What happens if you are unintentionally – but legally – responsible for bodily injury to another person or property damage? If you have liability insurance, it will pay and render services on your behalf.

Replacement Value: Did you purchased your home and belongings years – or decades – ago? If so, their value has decreased over time. Some homeowner’s policies will reimburse you for their current value, not what you paid. Replacement value coverage pays you for the cost of replacing property without deducting for depreciation.

Actual Cash Value: The cost of repairing or replacing damaged property with property of the same kind and quality, less depreciation.

Additional Living Expense: If a fire or flood damages or your home, or there is some other reason you can’t live in it, you may have to stay in a hotel. Who pays for that? Additional Living Expense coverage, also called Loss Of Use Coverage, provides reimbursement for hotel rooms, meals and other expenses when you have to maintain temporary residence elsewhere because of a situation that is covered by insurance.

Water Back-Up Coverage: Your insurance covers the pipes inside the house, but not pipes leading to the house. Old pipes break all the time – or there could be a sewer or sub-pump malfunction – and you could be liable for the damage unless you have Water Back-Up coverage.