Home covered? Reread policy

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Home covered? Reread policy

Fine print reveals exclusions, limits

Dugas

USA Today

Sept. 15, 2002

A homeowner insurance policy probably is not high on your reading list. Yet

it could be quite an eye-opener if you've never bothered to take a close

look.

You can expect to be covered if a raccoon, skunk or other wild animal wreaks

havoc in your home, but standard policies won't cover damage from termites,

rodents or your pet ferret. If your home is swallowed by a sinkhole because

it was built over an old coal mine, you're out of luck, unless you bought

special sinkhole coverage.

Most standard homeowner policies still cover terrorism-related claims, but

in the wake of an explosion of costly toxic mold claims, it's tougher to get

insurers to pay to clean up mold contamination. Some insurers are excluding

mold coverage altogether.

Complex issues such as water damage can be confusing, and it's important to

know about exclusions or policy limitations. You often can purchase

additional coverage for a modest price.

Insurers usually offer several basic levels of coverage. The so-called HO-3

policy is the most common. That stands for " homeowners No. 3 policy, " and it

covers all perils unless they are specifically excluded.

Such policies generally won't protect you against major catastrophes like

war, nuclear disaster, earthquake and flood. Earthquake and flood insurance

is available but can be costly in high-risk areas.

Limits on coverage also affect personal property. No matter what the value

of your jewelry, furs and watches, standard policies typically will pay

$1,000 to $2,500 - and that covers only theft. If you accidentally drop your

diamond ring down the drain, you won't get a dime.

Keep in mind that insurance policies are not always black and white.

Water-related damage, for instance, is one of the murkier homeowner issues.

Most policies won't cover damage if your sewer backs up, but you can often

purchase separate coverage for sewers and drains. You probably will be

covered if a pipe bursts, but even if the damage from a burst pipe is

covered, your insurer may refuse to pay to repair the pipe if it broke

because of normal wear and tear.

If your claim is turned down, ask the insurer to put its decision in

writing, pointing to the policy provision that is the basis for its denial.

You may decide to appeal to a higher level at the company. As a last resort,

consult a lawyer.

Note that if your insurer changes or limits its coverage, it won't take

effect until your policy comes up for renewal. Be sure to read all the

information, especially the fine print, that comes with your renewal notice.