Most homeowners and renters know they need to have insurance coverage.  Unfortunately, most don’t know what their policy covers or doesn’t cover as is usually the case.  From drainage issues to mold to who is responsible for the extra utility bills during the loss, many insured people don’t know about several relatively major. 



Sump Pump and Drain Backups
When it comes to sump pumps and drain backups, coverage for these issues is nearly always a separate endorsement on the policy.  The endorsement is to cover any loss due to sump pump failure or backup from a drain of any kind. This type of coverage goes up to a cap, usually $5k, $10k, $15k, or $25k.  Occasionally you can find higher caps, but most insurance companies don’t offer more than $25k. This cap is the maximum amount available for both mitigation and repairs. Any amount over the cap becomes the homeowner’s responsibility.  It’s extremely important to discuss this endorsement with your agent to understand the give and take of extra premiums versus the safety of the extra coverage. It’s usually best to go with the highest coverage offered if it’s possible for your budget.    


Mold
Most people are not aware mold coverage is not standard on a homeowner’s insurance policy.  Many insurance companies don’t offer mold coverage even as a separate endorsement. Like sump pump coverage, mold is covered up to a cap when it is covered at all.  Because mold remediation can be extremely costly, it’s best to go with the highest coverage endorsement your insurance offers, if available.  


Collectibles and Hobbies
Coverage of collectibles and hobby items can be very company-specific and very dependent upon the value of the items. It’s important to ask your insurance agent about the company’s policies.  Most companies require a separate endorsement for collectibles, although the definition of collectible can vary greatly from company to company. These endorsements are especially important if your collectibles are worth far greater than face value. If the endorsement isn’t purchased, typically the company will only cover the face value of an item.  This limitation means that if you have a comic book with a market value of $150.00, but a face value of $0.10, you’ll only get $0.10 for the comic in the event of a loss if you don’t have a collectibles endorsement on your policy.  


Utilities During a Loss
When a loss occurs in a home, utility bills typically increase.  This increase could be anything from a higher water bill due to running water from a pipe break to higher electric bills from equipment usage during mitigation and restoration.  It’s important to know that the insurance company of the responsible party usually will pay for these increased bills. That means if a renter is responsible in a rental, the renter’s insurance should pay for the increase.  Likewise, if the property owner is responsible, whether in a renting or owner situation, their policy should cover it. The most common way for an insurance company to determine the amount to be paid is to take the last two-to-three months of bills before the loss and average them to determine the amount owed.  


Renter’s Insurance 
Many renters aren’t even aware they need coverage, let alone what the policy covers.  A rental policy largely only covers the contents of the home – your “stuff.” Other coverage could include food and housing if the loss is such that the home isn’t habitable. Utilities may also fall under the policy if those bills are the responsibility of the renter.  When it comes to food, though, it’s important to always keep the receipts for what you spent. The insurance policy usually will not cover food upfront but will handle it as a reimbursement instead. 


Insurance policies can be tricky and intricate. It can be difficult to know what’s covered both when purchasing the policy and in the event of a loss. Talk to your agent about all the situations that may arise in your home to cover all contingencies.  Know what the different limits and caps are for your policy, so you’re prepared in the event of a loss.