Homeowner Insurance Laws

Homeowner's insurance: Are you covered?

Homeowner’s insurance is designed to protect damage from specific weather disasters, fire, theft, injuries, etc. You must then buy separate policies for floor and earthquake coverage.

Angie’s List asked highly rated insurance agents about homeowner’s insurance coverage.

10 tips to help homeowner’s get proper coverage:

Annual review: When you get your renewal notice, talk to your agent about whether you need to adjust your coverage. Update your policy if you have added square feet, remodeled, bought expensive items like jewelry/artwork/electronics, added a pet, boat, changes in your household, etc. Determine whether you have adequate liability insurance to protect yourself if someone is injured on your property. Consider increasing your liability protection if you install a pool, etc. Get what you need: Replacement cost insurance covers the cost of replacing your home and is generally the policy for most homeowners. Your agent will evaluate your home and its contents and write a policy that would replace it at that value. Get specific: Find out what your policy says about storm, water, mold, wind and flood coverage. In the past 10 years, companies have increasingly changed the language about these specific items. Ask about adding specific endorsements if your agent or company doesn’t offer the coverage you want. Public adjuster: If you experience a sizable loss, consider hiring a public insurance adjuster who will file and submit your claim on your behalf. These adjusters often have years of experience on the private insurance side and work to get homeowners the best settlement possible. Their compensation is a percentage of your settlement. That percentage varies by state. Crash course: Familiarize yourself with what you are entitled to receive in the event of a loss. Ask your agent about his or her experience in handling a loss claim.

Little Known Homeowners Insurance Risks: Law & Ordinance ...

You’re a smart homeowner. You’ve always carried enough homeowners insurance. You’ve reviewed your policy regularly and added coverage when you made improvements. You even have supplement flood and earthquake policies, just in case. So imagine your shock when a fire destroys half your home and you learn that changes to your local or state building codes are going to add 50% to the cost of rebuilding…and your insurance isn’t going to pay it because of Ordinance or Law exclusions.

Regarding Ordinance and Law coverage, the Insurance Services Office, a leading information source for the property and casualty insurance industry, states in its Commercial Property Causes  of Loss forms that insurers will not pay for loss or damage caused directly or indirectly by “the enforcement of any ordinance or law: 1) regulating the construction, use or repair of any property; or 2) Requiring the tearing down of any property, including the cost of removing its debris.” A similar exclusion is included in most other property calls for expensive building, lot size or frontage requirements and restrictions, and stringent environmental and pollution control laws governing demolition or reconstruction. Some laws even designate that when a certain percentage of a building has been damaged, then the rest of it must be destroyed before you can begin to rebuild. And if you live in an area that is prone to earthquakes, floods, or hurricanes, you’ll certainly face prohibitions about where, how or whether you can rebuild.

Essentially, your risk as a homeowner falls into three areas:

The loss of value to the undamaged part of your home that has to be demolished or modified to meet current codes, or when the building damage is greater than the percentage allowed by code, or when rebuilding is not allowed under current code.

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