As an insurance agent I have learned so many things about home and auto insurance over the past year. Things that I had no idea about before going into the industry. While you may think you’re adequately covered and understand your policy, the truth is you probably don’t.
Here are 5 things you don’t know about your homeowners or renters coverage.
The Significance of Claims
You’re probably aware that filing claims will make your insurance go up. But the fact is that filing claims can actually get you dropped by your insurance company altogether.
If you file a claim and nothing gets paid on it, it still counts against you. It doesn’t matter what amount the insurance company has to pay out – a claim is a claim.
Most home, renter, and auto claims will stay on your record for 3-5 years. File too many claims and you’ll definitely pay the price, either in premium or by being dropped as a customer altogether.
How Heavily Your Credit Score is Weighed
I always knew that insurance companies used credit scores to determine premium. What I didn’t know is that this is one of the biggest factors they use when calculating what price you’ll pay.
While there are several factors that play into your premium, claims history and credit scores are by far the biggest two.
Did you know that you can also check your credit score for free? Just use a service like Credit Sesame, and you can get your free credit score as well as suggestions for improvement. This can help you get the best rate on your insurance policy.
You Are Not Really “Fully Covered”
Insurance policies are tricky. You may think you are fully covered and your agent may tell you so as well. Unfortunately your policy comes with a whole list of exclusions to your “full coverage.”
There are three levels of coverage on a homeowner’s insurance policy. These are basic, broad, and special. Basic offers the least amount of protection, special offers the most, and broad is somewhere in between.
Even though special coverage offers the most protection there are still exclusions. These exclusions are often mold, fungi, earthquake, and in some instances water back up.
Check your policy for a full list of exclusions. If there is a coverage that you feel you need but is not on your policy ask your agent to add an endorsement to cover it.
Your Big Ticket Items May Not Be Covered
While your personal property coverage is normally 70 percent of the dwelling coverage on a homeowners policy and your choice on a renters policy, that doesn’t mean that all of your property is covered.
For instance, most of the insurance companies I work with require any item valued at more than a thousand dollars to be listed individually on a policy. This is referred to as scheduling. When you schedule items on your policy you will have to pay an extra premium, but if you don’t schedule them you probably aren’t going to get paid for them in the event of a loss.
You’ll also be required to show the value of the items in the event of a loss. That is why it’s a good idea to keep a digital copy of your receipts for big ticket items.
Trampolines, Swimming Pools, and Certain Dog Breeds are Prohibited
If you have a trampoline, swimming pool, or “vicious” breed of dog you may not be fully covered liability wise. In fact, out of the ten or so companies I work with not a single one will offer coverage to a person who owns a Pit Bull.
There are a lot of liability factors associated with trampolines, swimming pools, and dogs on the vicious dog list. You need to check with your agent to see if your insurance company accepts these things.
While properly fenced in swimming pools usually get the okay, my experience is trampolines and Pit Bulls, Rottweiler, and other vicious dog breeds will get you cancelled.
You can get a full list of unacceptable dog breeds from your agent.
Conclusion
While you may think you know your homeowners or renter’s policy the truth is you really don’t. You need to pay special attention to the exclusions that come with your policy because these are the perils that are not covered.
In addition it’s a good idea to check with your agent if you have what is to be considered a vicious dog, trampoline, or swimming pool. You may not have liability coverage for these. So, if someone was to get hurt as a result of your dog, trampoline, or pool you’d be responsible to compensate them for any medical bills.
Every year when you get the renewal on your homeowners or renters policy go over it with a fine tooth comb and call your agent with any questions that you have. It’s better to be safe than sorry.