What's In My Policy - Homeowners

5/1/2017


Finding out what your homeowners insurance policy covers isn't easy.  Most auto insurance policies are very similar and you're probably not missing much by never reading one, homeowners policies however do vary from one insurer to the next.  Almost no-one actually reads their homeowners policy because it is so painful - long-winded mumbo jumbo that's very difficult to understand.  Large claim disputes over what a policy covers are sometimes litigated, with dueling lawyers painting conflicting pictures of what the language actually means. 

Aside from its arcane nature, there are a number of other factors at play that make this a tough topic (1) the overall policy language consists of multiple documents, often a base policy, a declaration (dec) page (or pages) and multiple policy endorsements that can partially or completely reverse the coverage provided in the base policy or in other endorsements (2) insurers often only provide a full set of completely accurate documents on request to a specific policyholder (3) the documents we review may not be even approximately the same as the ones that apply to you (the exact forms appropriate to you are usually listed on the top or bottom of your pages and sometimes listed on your dec page (4) there are multiple versions of each document that change over time (5) insurance is mostly regulated by states and companies often have state specific endorsements to accomodate the regulators in each state (6) sometimes insurers don't even write their own policy language, relying on non-insurance companies to supply verbiage (7) the language is far from clear in many cases, who knows exactly what perils your jewelry might or might not be insured for  (8) the language is usually copyrighted, making it harder for 3rd parties to explain what's in there (9) policy language that matters to one policyholder may be irrelevant to the next, who cares what liability coverage is provided for a boat you own if you don't own or use a boat.

The documents we review and the information we provide are limited by all of these challenges and our intent is not to provide a definitive answer to the question of what's covered, but rather to compile a list of our opinions so that a policyholder can follow up with their insurer and get a (more but still not completely) definitive answer to the questions of what's covered, and to provide at a high level our opinions of coverages from the larger insurers. We also provide background through brief snippets of policy language heavily edited to support our opinions. The color coding we use reflects our assessment of the relative quality of the coverage for the specific item under consideration, keep in mind that the most important issues for a homeowner typically revolve around things like is the building insured adequately and is there replacement cost coverage. There's no analysis here of the cost of providing the various bells and whistles, it may be that a more stripped down policy with a lower premium is more appropriate to your needs.  Alternatively, the bells and whistles might be just the thing for your needs.

Some of the items may increase your awareness of the possibility of fiing a claim, if your insurer covers a loss of refrigerator contents when the fridge breaks down and waives your deductible, you may want to file a claim so you incur the cost of a new fridge or repairs, but at least get your insurer to pay to restock you.


Other articles:
Coverage/Price Comparison
Auto other coverages
Qualified annuity
Qualified Longevity Annuity Contract
Insurance Games
What's In My Policy - Homeowners
Shopping with the right sellers
Auto liability
Bodily injury liability
Property damage liability

more