What Does Your Homeowner's Insurance Cover?

Doug MacDonald, President & CEO of Murray & MacDonald Insurance Services joins to discuss things you don’t typically think about with property and casualty insurance.

Doug suggests that your watercraft policy give you replacement cost coverage for partial damage. You should encourage everyone on your boat to wear a life vest and have an umbrella policy as an additional layer of liability. Your homeowner’s policy extends to physical damage as well (e.g., your golf ball accidentally hits someone’s head and creates a lot of damage).

Hurricane season runs June through November, and with that comes floods and erosion. Erosion is not typically covered in your homeowner’s policy, nor is a mudslide or sinkhole. Homeowner policies will give you a sinkhole rider. In Florida, where they are common, they mandated that homeowner policies must cover sinkhole coverage.

Earthquake coverage is also not covered on a standard homeowner’s policy. There are about 5,000 earthquakes felt each year in the U.S., so there’s going to be exposure. New England is an earthquake prone zone area. The Federal Emergency Management Act (FEMA) will often come in and offer home owner loans on more favorable terms to provide those affected a place to live and dry clothes, but they’re not going to rebuild.

There are three deductibles that you'll see with a wind storm – windstorm, storm, and hurricane. There are also named storm deductibles that go into effect if your home is damaged in a storm that's been named by the National Weather Service or National Hurricane Center.

There have been 9 catastrophic events in the last three years, each one of those over $10 billion in claims. This is causing the reinsurance marketplace to raise rates, so a lot of people are seeing that homeowner prices are going up due to the cost of repairs.