Your standard home insurance plan has basic limitations and exclusions that some homeowners may not be aware of and, therefore, could be underinsured when it comes time for a devastating event. Supplemental policies fill the voids left by the basic homeowners plans. In your standard plan, there is Coverage A which sets aside a majority of the protection for the main dwelling and branches off to provide a large portion to the contents, personal property, and liability, as well as, loss of use. Then you have Coverage B which will protect other structures that are separate from the dwelling but still within the same premises.
The standard protection provided by home insurance covers perils generalized along the lines of sudden and accidental, natural disasters, fire, theft, and things of that nature with notable exclusions including floods, earthquakes, landslides/mudslides, anything due to negligence or normal wear and tear, and variations determined by each carrier based on location and risk in the region. You can purchase the supplemental homeowner’s insurance policies, riders or endorsements in order to have these standardly excluded perils added on to your regular policy so that if one of these disastrous events were to occur, you would be covered.
Types of Supplemental Home Insurance
A supplemental home insurance policy is coverage that goes above and beyond what your standard home insurance coverage provides. You need to pay additional money aside from your regular premium, but you will be protected against loss that your typical homeowner’s plan won’t give.
- Personal. If you have valuable personal property such as jewelry, fine art, collectibles, or other costly items, a basic home insurance policy has limits on coverage that generally range from approximately $1000 up to $2000. There is an endorsement supplement for valuable articles where homeowners are able to protect their expensive possessions up to the full value. The homeowner is protected due to accidental disappearance, damage, or theft of the belongings.
- Flood. Generally, with a standard home policy, floods are not typically covered and there is limited coverage for water damage. There is a flood supplemental policy that will protect the structure of the dwelling along with personal possessions. The National Flood Insurance Program or NFIP provides supplemental flood plans to those who reside in designated flood regions. Their policies pay for rebuilding homes damaged upwards of $250,000. There are private insurance carriers who provide added protection in higher-risk flood areas above that which is offered through the NFIP.
- Sewer. Most insurance carriers will offer sewer backup protection as a supplement to the standard homeowners plan for added premium cost. This is not something that is covered basic and can occur if the sump pump is unable to handle heavy runoff water after a downpour of rain.
- Earthquake. Most of your insurance carriers are going to offer Earthquake coverage as a supplement policy or it can be added as an endorsement. It won’t generally be included as a part of the standard plan. This type of protection is going to give you the financial aid that you need to help repair or replace loss of your household contents. If your home itself is destroyed, this can help you to rebuild. There is further coverage to help with costs associated with displacement.
You may be surprised to find out how much your basic home insurance policy actually doesn’t cover. It’s vital to go over every aspect of the contract when you sign on, specifically asking the question, ‘what isn’t covered’, to learn your exclusions. Then consider paying the extra amount for those supplemental policies that will make you feel safe in protecting your assets.