Homeowner’s insurance, also called home insurance or hazard insurance, is insurance that is typically purchased prior to the purchase of a home. If the home is being purchased with money that has been borrowed from a bank in the form of a mortgage loan, the bank will require the homeowner to purchase and show proof of homeowner’s insurance before the bank will cover the cost of the home. This protects the bank’s investment in the event that the home is damaged or destroyed.
Reasons for Filing a Homeowner’s Insurance Claim
There are many reasons for filing a homeowner’s insurance claim. Homeowner’s insurance will generally cover a portion of the policy holder’s expense if there is damage to the home, loss of personal belongings, or if someone is injured on the property. Homeowner’s insurance can be of great help to policy holders in times of misfortune.
Reasons for homeowner’s insurance claims:
- Natural disasters such as hail, flooding, snow damage, or lightening strikes
- Injury on property
- Theft of personal property
- Damage to home from a crime such as breaking and entering
- Damage to home from burst pipes or leaks
- Fire in home causing loss of property and damage to home
- Foundation deterioration
- Mold damage to home
Why a Homeowner’s Insurance Claim May Not Be Covered
In many cases, a basic policy will only cover certain events up to a certain amount. Additional coverage must be purchased at a higher premium to cover many disasters, especially if the disaster is common in the area. An example of this is sink hole insurance in Florida. Sink hole insurance is typically not included in a basic homeowner’s insurance policy, and must be purchased additionally.
Reason for Separation of Homeowner’s Insurance Claims Coverage
Companies that handle homeowner’s insurance claims have increasingly started to separate common hazards from basic policies. The reason for this is that there have been many widespread disasters in recently years, and they have severely impacted insurance company’s profits. To remain in business, many insurance companies have had to make decisions about how to increase profits. There are regulations on how much insurance companies are allowed to raise rates, so insurance companies have had to find ways other than increasing homeowner’s standard insurance plans to unreasonably expensive amounts.
The solution to this dilemma that many insurance companies in the United States have adopted is to separate the various disasters into separate policies that can be purchased additionally. Although this solution combats a major increase in basic homeowner’s insurance policy rates, homeowners that do not opt to purchase the additional coverage will not receive any monetary assistance if a disaster arises that is not covered on the basic policy.
Process for Filing a Homeowner’s Insurance Claim
Insurance companies offer comprehensive plans for filing homeowner’s insurance claims. Companies will often ask for some kind of proof, especially in cases of theft, where there is no item to show. Proof can be provided in the form of pictures, receipts, warranties, or tax records, depending on the scenario. Insurance companies also typically require the homeowner to take some kind of action to mitigate further loss or damage to property. Policy holders should file the homeowner’s insurance claim as quickly as possible, as many insurance companies have a time limit on filing. In many cases, a homeowner’s insurance claims adjuster will be sent out to assess the situation and provide the homeowner and the insurance company with documentation of the damage or loss.
Purchasing Homeowner’s Insurance
Purchasing homeowner’s insurance is a balancing act. Homeowners will want to make sure that the policy being purchased will cover the basic costs of replacing or repairing the dwelling, cover medical costs in the event of injuries occurring on the property, and cover loss of personal items. The amount of coverage on each of these can be adjusted to cover more or less money in the event of catastrophe, and to require a higher or lower deductible be paid by the homeowner before the insurance company will assist. The more coverage that is desired, and the lower the deductible, the higher the annual insurance premium will be.
Homeowners will need to carefully review the insurance coverage before deciding on a policy. Many exclusions are listed in the fine print on policies, and homeowners should pay special attention to those exclusions. The policy that is decided upon should cover an amount that is reasonable to replace property and repair or replace the dwelling. If the basic policy does not cover disasters that are common to the area, the separate plans to cover those disasters should be purchased.
Florida Homeowners Insurance Lawyers
In some cases, an insurance company will deny a homeowner’s insurance claim that the homeowner believes was covered. If this happens, the homeowner should ask that the reasons for the denial be put in writing. If the homeowner receives this statement, and believes that the insurance company intentionally withheld information or provided misleading information to avoid covering the homeowner’s insurance claim, there may be legal options that can be pursued. Please contact our staff today to get in touch with our Orlando Homeowners Insurance Lawyers.
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“National Flood Insurance Program.” FEMA. Federal Emergency Management Agency, 05 Aug 2013. Web. 11 Sep 2013. <http://www.fema.gov/national-flood-insurance-program>.