Did Your Home Insurance Policy Change?

Hurricane Katrina caused many insurance companies to re-examine the exposure they had from existing home insurance policies.  As a result, many have modified the language in their policies in subtle but critical ways.  So it’s time to ask – did your homeowners insurance policy change?

One of the biggest changes concerns damage from windstorms.  Now, instead of identifying deductibles for this incident in a dollar amount, they are frequently shown as a percentage of a policy’s total value.  Thus, instead of paying your normal deductible of $250 or $500, you could pay $10,000 on a $200,000 policy before the insurance company starts to bear the cost.  If you live in an area that’s subject to windstorms or hurricanes, call your homeowners insurance company or insurance agent to confirm the exact details of your policy. 

Also be on the lookout for an “anti-concurrent causation” clause.  This clause gives home insurance companies a way out if coverable damage occurs at the same time as non-coverable damage.  For example, if the wind blows the roof off your house (a covered incident), and the home then floods from rain or hurricane (a non-covered incident), then companies can reject the claim under the provisions of this clause.  Again, check with your insurance company or agent to see if this is part of your policy. 

Depending on where you live and the perils you are normally subject to, these items may not impact your homeowners insurance policy, especially if everything else about the policy is great.  Home insurance isn’t a one-size-fits-all commodity, so you have to decide whether your individual policy meets your needs.  At least now you know a few more things you need to find out about your home insurance policy first.