Standard Policy Exclusions
No policy covers absolutely every occurrence. In fact, there are a handful of standard policy exclusions that you should be aware of. Coverage for these items can be purchased at extra cost.
- Business Property: Equipment used in a home business must be insured separately. Get a rider attached to your homeowner's policy.
- Host Liability: The increasing number of lawsuits against hosts whose guests are later involved in alcohol-related accidents has led to liability coverage through a special "host liquor" rider. Some policies may automatically cover this under the personal liability provision of the policy.
- Earthquakes: The standard homeowner's insurance does not cover earthquakes, although fire damage caused by an earthquake would be covered. Adding protection for the damage caused by the quake itself can be purchased. Costs vary according to the region.
- Floods: The standard policy does not cover flood damage. Special flood insurance is available from the federal government or private carriers and is available through your agent. You do not have to live near a body of water to need flood insurance. A person living in a desert may be at risk of flash flooding due to rainstorms many miles away. At the same time, someone living on or below a hill should carry flood insurance due to the risk of mudslides, another peril covered by a flood policy.
- Scheduled Personal Property: All polices contain sub-limits on certain classes of property such as jewelry, furs, cash, and metal ware (silverware, pewter, gold, etc.). In addition, the replacement cost provisions for personal property do not apply to items that derive their principal value from their historic or artistic nature. These limits can be increased either by a specific endorsement such as amending cover for theft of cash from $100 to $500 or by the listing of individual items of high value on the policy. Some of the types of property that should be listed (scheduled) on a policy include: jewelry, fine arts, antiques, stamp or coin collections, and musical instruments. This coverage used to be provided by a form called a personal property floater. However, in most cases today, coverage can be added to the homeowners' policy by adding a scheduled property endorsement. In order to be properly protected, you would need to document the values of such scheduled property by a recent bill of sale, credit card receipt, or qualified appraisal. Your agent can assist you in finding the best way to document the insurance value of the property to be listed on your policy.
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