Supplemental policies offer coverage that extends beyond what is provided in a standard homeowners policy. Many homeowners are unaware that home insurance provides limited coverage for valuable personal property and provides little or no coverage for loss caused by floods, water damage or earthquakes. Supplemental policies cost extra but cover disasters a typical homeowners policy does not.
Homeowners insurance protects your personal property up to certain limits. Fine arts, jewelry, furs, collectibles and other expensive items typically have coverage up to $1,000 or $2,000 on a standard home policy. Homeowners can insure expensive belongings with a supplemental “valuable articles” endorsement to protect the items for their full value. This personal property endorsement allows the homeowner to replace the expensive property for loss due to theft, damage or accidental disappearance of the item.
A standard homeowners insurance policy has limited coverage for flood or water damage. A supplemental flood policy provides coverage for the structure of the home and your personal belongings. Private insurers and the National Flood Insurance Program offer supplemental flood policies to homeowners who live in designated flood zones. “Flooding can happen anywhere, but certain areas are prone to serious flooding," notes the NFIP. National Flood Insurance Program policies pay to rebuild the structure of a flood damaged home up to $250,000. Excess coverage purchased through private insurance companies offers additional protection in high-risk flood zones by providing extra structural and contents coverage above what is offered through the national program.
Sewer backup occurs when a home’s sump pump cannot handle excess runoff water from heavy rains. Although most standard homeowners policies provide coverage for water damage resulting from broken pipes, the policy usually does not cover sewer and drain backup. Most insurance companies provide sewer backup coverage as a supplement to a homeowners policy for an additional premium.
Coverage for earthquake damage is not automatically included in a standard homeowners policy. Earthquake insurance can be a supplemental policy or added as an endorsement to a homeowners insurance policy. Most insurance companies offer earthquake coverage. In states like California that are prone to several earthquakes per year, insurance coverage is available through agencies such as the California Earthquake Authority. Earthquake coverage provides the financial assistance to help you repair or replace damaged household contents such as furniture, major appliances and clothing. If your home’s structure is damaged or destroyed by an earthquake, this coverage will pay to rebuild your home. Further, earthquake insurance pays for temporary accommodations and meals if you cannot inhabit your home because of the disaster.
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