What Homeowner's Insurance Doesn't Cover-Are you prepared?

[RKunz2]

Just received a questionnaire on our package (Homeowner's/Auto) policy from our broker. Now, keep in mind that our broker is one of the best in this area, and our policy is not a bargain basement - cheapo - policy. Matter of fact, according to the Declaration, it's says "Deluxe." So, I truly wonder exactly what "Deluxe" means when it comes to coverage?

Anyway in reading through this questionnaire, I see "some" of the exposures the carrier specifically excludes;

1) Earthquake
2) Mold
3) Sewer Backup
4) Flood
5) I.D. Theft

Items 1 and 4 are totally understandable. Traditionally, Homeowner's has never covered those exposures without a rider policy specifically for that risk. Item 5 is relatively new, so that's OK. Mold has been around since the beginning of time, but only recently "discovered" as a potentially hazardous problem, but since some carriers took such a bath on it (poor underwriting and/or inspection practices), everyone just excludes it entirely now. Sewer Backup??? Wouldn't that fall under unforeseen and sudden water damage? What the heck?

For any carriers out there that might be browsing this "opinion," let's all just be honest, shall we? In big BOLD letters on the front of every application and policy contract (repeat after me please)...."WE WILL COVER YOU AGAINST NOTHING, NOT EVER, UNDER ANY CIRCUMSTANCES. WE'RE JUST HERE TO COLLECT OUR PREMIUMS, BONUS OUR EXECUTIVES, AND BE ONE OF THE LARGEST CASH COWS IN CORPORATE AMERICA TODAY ASIDE FROM THE OIL INDUSTRY."

At least you'd have the respect of some just for telling the truth...

America, do you agree? Yes, No, Maybe so?

[sanddog]

You say your broker is one of the best in the area? Yet you don't seem to understand and HO-3 ISO form type policy. My clients no their policies. Chances are your agent is a Direct writing agent, and only know what is fed to them by that carrier. (farmers/allstate/statefarm). I can see why you don't understand your coverage's. If you cheat the insurance company, they will cheat you.
I'm guessing your another unhappy "Allstate Deluxe"

[Rob]

RKunz2,

There are some carriers that offer optional coverage for backup of sewers and drains. If you want or need this coverage it is available.

The basic homeowner's policy is designed to cover Fire, Lightning, Windstorm, Hail, Explosion, Riot or Civil Commotion, Aircraft, Vehicles, Smoke, Vandalism, Theft, Volcanic Eruption, Falling Objects, Weight of Ice, Snow, or Sleet. So to say they should say "WE WILL COVER YOU AGAINST NOTHING, NOT EVER, UNDER ANY CIRCUMSTANCES" is a bit of a stretch.

There are reasons why mold is not covered. This article may offer you some insight

http://iaq.iuoe.org/iaq_htmlcode/iaq_ne ... enance.htm

If it were covered in some states you would not be able to afford homeowners insurance or it wouldn't be easily available.

[RKunz2]

Sanddog and Rob,

Thanks for your feedback. I enjoy the different perspectives and knowledge.

You're right, I don't know as much as I should about Homeowner's and I found that out back in 2003 when AAA ran me through the horn hard. What I do find to be consistent with just about any carrier these days is contravening policy language, which has become somewhat of an art for their legal gurus. The other mentality is the "God complex" of carriers, a term more commonly known in medical fields, but carriers these days can do no wrong (period, no question or discussion necessary). Even when pressed by DOI or judicial means, they flaunt their unlimited resources and legal assets to crush anything or anyone that dares question that their word, opinion, or position is not the gospel.

OK, see your points on sewer, but water damage isn't covered either. (I know, I know) carriers may tell you it is, but they avoid it like the plague...or MOLD damage when it comes time to pay up on a claim. Trust me on this one, I've seen it first-hand and have heard statements by City officials that cooberate this shift in claims handling. Commonly, the carrier will blame the homeowner, city code, building or builder defect, and just about everything else they can think to throw at the wall, hoping something will stick. If the insured cries "FOUL" the carrier will ignore it, accuse the insured of "cheating" and force a situation.

By the way, State Farm is the only carrier I've personally had that treated me like a human being; however, I'm not with them anymore. Not Allstate or Farmers either. My agent is not a direct writer (least not in the market I'm in) they're a broker. Although the agency is excellent, my CSR leaves a few things to be desired and yes Sanddog, I think he regurgitates exactly what the carrier tells him.

I don't cheat insurance companies. Even including Auto and Business liabilities, I've had a whopping total of 6 claims in almost 40 years, and none of catastrophic nature. The Automobile Club is the company that really woke me up to reality a couple years back. It's been a very hard awakening too because I've worked indirectly for insurance carriers for 16 years. I've also been witness to things that most people would not ever hear or read about, so I know there are dark secrets and skeletons, just like most of corporate America.

Sorry, I'm rambling. I'd just like to see more integrity, honesty, and guts when it comes to business these days....all the way around. Its truly sad when you respect someone that has the balls to step up and say, "I made a mistake, I'm sorry," or "We'll make it right, don't worry." Everybody lies and hides behind a plethora of veils to remove them from responsibility or accountability; it just depends on what suits them that particular day.

But that's just my opinion, what does it matter...

[RKunz2]

RKunz2,


There are reasons why mold is not covered. This article may offer you some insight

http://iaq.iuoe.org/iaq_htmlcode/iaq_ne ... enance.htm

Thanks for the article, Rob. I will read it.

[RKunz2]

Good article, Rob. Very interesting from a number of points of view.

However, I see phrases like; "elusive," "...this risk is not for the faint of heart," and "It is unlikely that mold coverage will ever be that simple" just reminds me of one simple and undeniable fact. An insured must have a team of legal experts, scientists, engineers, and insurance experts (preferably with a strong underwriting background) to double-check what they're being told by their agent, broker, or carrier. Than, you need another "oversight" group to check the people that are doing the checking to make sure what they're telling you is correct, and so on.

Now I can see why government is the way it is today. People no longer do what they say they're going to do, even when it's memorialized in a contract or some other form. So you need "experts" to check and advise you on things, than you need people to check the experts, and still more people to check the people that are checking the people that are supposed to be telling you whether or not this is a good thing. Hence, you've got modern day government.

I'm not being extreme because this is exactly what carriers are doing to their insureds. I'm in an industry where I have to consider (under Federal law) that I may be dealing with a "least sophisticated consumer." Therefore, if I don't make my explanations plain, clear, and concise, a court may find me at fault for confusing the consumer. Without getting technical, I say what I mean and mean what I say 100% of the time, or I'm out of here, no questions asked and very little room for arguement. I really don't see that same accountability present with carriers. Hell, half the time, I doubt that even the best and most astute broker knows what in the world the carrier is trying to say or do for that matter.

(...climbing down off the soap box and shutting up now...)

Happy Thanksgiving all.

[sanddog]

You have some good points concerning Language. However when your a Lawyer, Doctor, Ins. Broker or Carrier or a man of cloth. The point you make must be direct and concise or the message can be missed construed.
If you don't understand the message then call messenger, were here to help.
KNunz2: you said...OK, see your points on sewer, but water damage isn't covered either.
The messenger say any HO-3 policy has coverage for water damage up to the property limit.
And the messenger say that on some forms even Mold damage is covered but limited to certain amounts.
You need to find a another agent............