Insurance Surprises

Surprises are found mostly in the Definitions and Exclusions sections of the policy. They are not
designed to avoid claims. Their purpose is to more clearly define the policy's coverage and purpose. The
Homeowner policy contains more surprises than most other policies. The reason is because the Homeowner
policy contains very broad coverage for both property and liability sections. Broad language requires limitations
to clarity the intent of the coverage. Read about the history of the Homeowner policy.

Flood Flood damage is Not covered by the homeowners policy. Flood damage coverage can only be covered
       by the purchase of a separate flood policy. Do not confuse Flood Damage with Water Damage. Water
       damage is covered under most homeowner policies. Flood waters originate from outside the house. Water
       from Water Damage must originate from within the house. Solution A flood policy is available for
       everyone. 40% of all flood claims are on properties located outside of flood plains. For this reason a
       special flood policy is available for those areas at a moderate cost.

Freezing pipes Damage from frozen pipes is covered but precautions must be taken if you are to be
       absent from your home during freezing weather. Solution Most common precaution is to maintain heat if
       your absence will be short, this includes adequate fuel in the oil tank. Draining and winterizing is the
       preferred method for longer absences.

Property with limited coverage Certain property is limited in coverage because of the unusual risk it
       presents and the average household may contain little or none of these types of property. Premiums would
       be unfairly high if limitations were not used. Solution Your policy can be expanded to cover most of these
       items by an endorsement. A floater should be purchased on items of value. The cost of this coverage will
       depend on the type of property and it's value but is very reasonable in most cases. Below is a list of the
       types of property with limited coverage. Read your policy for a complete list

Uncovered laws and Ordinances This might be one of the most misunderstood areas of the
      Homeowners policy and it effects nearly every one who owns a home. The policy does cover all damage
      caused by fire, wind or any other insured peril. But Does Not cover the tearing down or modifying any
      portion of the house not damaged. This sounds very logical except many communities require, by law,
      demolition or modification of undamaged portions of your house if sugnificant damage has occured.
      Significant damage could be as little as 50% Solution is to purchase a Ordinance or Law endorsement
      adaquatly covering your communities requirements.

Business conducted at the home Many people run busineses or store business property in their home
       without realizing it can cause gaps in coverage or can void coverage altogether. Business property in
      your home is covered up to $2,500 by most policies. However business liability is never covered unless
      your policy is properly endorsed. It should be noted that business property stored in a detached garage or
      any other outbuilding can void coverage altogether. The defination of a business is quite broad and
      includes any activity conducted with profit intended. It does not saythat a profit must be made nor does it
      says that it takes up a significant amount of your time. An Amway representative is a business. Arts and
      crafts made for sale at a garage sale or flee market can be a business. Only the law can determine an
      activity to be a business. Unfortunately at times that can be too late. Solution is to add a permitted
      occupancy endorsement to your Homeowner policy or purchase separate business policy.

Personal Injury Do not confuse Personal Injury with Bodily Injury. Bodily Injury is injury to the body and
      coveed under your homeowners policy. Personal Injury is injury to the person or reputation and is not
      covered by your homeowner policy. damage to the person's person can occur through slander, improper
      eviction, invasion of privacy, false imprisonment, etc. Solution Add a personal injury endorsement to your
      homeowner policy. The cost is nominal.

Earthquake Damage caused by Earthquake is excluded. Solution Add an earthquake endorsement to your
      policy. The cost is low in low risk areas but can be extremely expensive in high risk areas

Mud slides, earth movement Damage caused by mud slides and any kind of earth movement is excluded        Solution Only the purchase of Flood insurance can cover mud slides and earth movement under some
      circumatances.

Motorized vehicles
      Damage to motor vehicles including their parts are excluded. We do cover damage to those motorized
      vehicles used to service the premises such as lawn mowers, snow blowers and vehicles designed to assist
      the handicapped. Liability coverage for all motor vehicles requiring registration is excluded other
      morotized vehicles can have exclusions when used off your property. Vehicles used to assist the
      handicapped are always covered when used for that purpose. Solution Always purchase Liability and
      desired physical damage coverage on all motorized vehicles including snowmobiles, dirt bikes, ATVs and
      all similar vehicles.

Identity Theft Loss by stealing your identity or the expense to get your life straightened out is not covered
      by the Homeowners Policy. Solution Add an endorsement to your policy that will pay the expense of
      straightening things out, up to a designated amount. However it will not pay for any loss itself. The
      additional premium is affordable.

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