Sample – Do You Know What Your Insurance Will Cover?

A survey released in May by shows that many Americans are not fully aware of what their homeowner insurance covers or doesn’t cover. It shows, for example, that about half of those surveyed did not know their insurance policy would not cover damage caused by an earthquake.

“Many consumers are purchasing insurance without really [comprehending] what they’re buying,” Laura Adams told

Here are some of the more common misconceptions:

  • Homeowners policies usually do not cover replacement of all of your possessions.  Check for coverage caps on personal belongings in your home. These can include jewelry or firearms.  You may have to arrange to pay more to get complete coverage.
  • 55% of those surveyed didn’t know that damage from mold resulting from a leak is frequently not covered.  Mold remediation can cost thousands of dollars, but you’re probably not covered if it happens to you. You can pay more to get mold damage coverage.
  • As noted above, your policy probably does not include damage caused by earthquakes.
  • Your policy probably does not cover flood damage. You’ll need a separate flood policy if you want to protect yourself. If you live in a flood zone, you may be required to have such a policy. But, if you live near such a zone, you should consider it a flood policy. They’re usually quite inexpensive if you don’t live close to water.
  • You need to make sure you’ve got enough coverage to replace your house, but that isn’t the market value of your home, which can also include the price of the land.
  • The report also showed 73% of those surveyed didn’t know their homeowner’s policy covers thefts from a self-storage unit or even your car, no matter where it was when the crime was committed.

The key takeaway from this report is that you need to read and understand your policy.  Your insurance agent should be more than happy to spell out the ramifications of your policy in plain English. If not, perhaps you need another agent! Because, as a homeowner, you need to know your investment is as protected as it can be.