An ‘insured peril’ is a cause of damage to your home that you are financially covered for in the event it takes place. Common insured perils include fire, theft, and certain environmental disasters. You may purchase additional coverages for perils not commonly provided at an extra cost to your monthly premium payment. Some perils are generally not included in home insurance policies.
For example, flood perils are usually not provided in a standard policy, and depending on the topography for where you live (whether you live in low-lying water-logged areas, or where water naturally drains like a valley), you may want to look into purchasing this additional coverage. Insurance companies often don’t include such policy elements due to the high-risk associated with them. If you are unsure as to whether you live in such an area, check with your local municipality/township or homeowner’s association. They will be happy to inform you of whether the weather in your area warrants such insurance.
It is important to be aware of which types of loss and damage you are covered for under your home insurance agreement. If you are in the process of making a claim for a loss sustained, you should obtain a copy of your insurance binder for your review. This is not the same as your insurance policy. A “binder” contains all of the fine print, legalities, and intricate documentation included in your policy, and outlines exactly what you are and are not covered for. You may be surprised to find that there are some things you are covered for that most are not even aware of. In the event of a claim, this is your responsbility, as it is unlikely that your insurance company will point these items out to you.
For example, when reviewing my policy for the fire claim we are in the process of, I realized that Additional Living Expenses actually covers more than I initially thought. Before the fire, I rented two rooms out in my home. Because of a stipulation in the binder (which is about 50-some pages), I am entitled to the “Fair Rental Value” of those rooms for the time that I am out of my home due to repairs or replacement. This is in addition to the rent that I have to pay while outside of my home. The insurance adjuster did not inform me of this, even when he was asking about the rooms I had rented out. This is an effort to save the company money. I know it seems underhanded, as they are legally required to treat your interests equally to their own, however the reality is less than ideal.
Another instance of this (during the same meeting), is when Scott from the new adjusting firm told me that I would only be covered up to about $5,000 for any tools I had in my house. He informed me that I should review my policy for more information. Upon reading the binder, which I obtained in eBook format on my phone (downloaded from my insurance company website), the policy states that tools that are used for a “business” are only covered up to $5,000. Seeing as my tools were owned completely by me, and used only in the renovations we had been doing on my home, I found that this was not the case, and that I am actually entitled to the full value of my belongings, including my tools.