What Does Your Homeowners Insurance Cover?

With the recent devastating weather happening, especially the recent hurricanes Harvey and Irma, it makes you stop and wonder……..what does my homeowners’ insurance really cover?  We all buy insurance and then pretty much forget about it and most of us just assume we are covered for most everything, and let’s face it, insurance policy contracts are not an easy read or are they something most people actually read.

The reality is, insurance coverage has become less generous and much more complicated, which deserves more of our attention, specifically more awareness to the details of our policies. Equally important, it warrants having an insurance agent you trust and that is also thoughtful about what your risks are as well as mindful that you have all the information surrounding what your coverages are and maybe even more important, making sure you understand what is not covered.

Just having homeowner’s insurance is no guarantee against major losses that can happen from events like hurricane Harvey or Irma.  Standard policies have a list of what is referred to as “covered perils,” which typically are things like fire, smoke, snow and ice damage, lightning strikes, hail, falling objects, window breakage, vandalism, explosion, theft and wind damage (unless wind and flood cause damage at the same time).  Standard policies also have a list of “exclusions,” which are the things that are not covered; these are typically floods, earthquakes, volcanic eruptions, war, owners neglect and sometimes even wind damage from events like hurricanes.  Some policies have clauses that state; if a non-covered peril and covered peril takes place at the same time, neither is protected.  (The above are only examples and not meant to be an exhaustive list of what is and what is not covered on any specific policy.)

Most of us, unless our mortgage company requires us to have flood insurance, don't even know what a flood zone is, let alone what our specific flood zone is, or if we should consider flood insurance coverage.  Hurricane Harvey is a perfect example of flooding that happened both inside as well as outside of the typical flood zone areas.  Some of the flooding appeared to happen or was at least made worse in some areas due to the need to release water from overflowing reservoirs specifically built to prevent flooding.  

Rising water, no matter the source is considerd to be a flood and most Standard Homeowners policies do not cover any flood damage.  Since we don’t live in a coastal area we may feel that there is not a need for flood insurance, but another flood in Tulsa like the Arkansas River flood in 1986 could indeed happen again.

The bottom line is this; your insurance coverages are one of the most important financial protections in your life and because of the increased complexity of today’s insurance products and markets, take them seriously and spend the time to understand your coverages, risks and threats.  Make sure you have a smart, well-educated and thoughtful insurance agent/partner. Unfortunately, the insurance industry does not have any education requirements, so anyone who can pass the licensing test can become an insurance agent and anyone can sell you insurance, the bigger question is; do they understand and make sure you understand what you are actually buying.   You need your agent to be your insurance partner for your home and business, so select them wisely!

Jeffrey Miller, LL.M.

Oklahoma CPC Insurance

Managing Partner