You no doubt have heard the terms "all-risk" and "full
coverage", but the reality is that these terms seldom truly apply in
insurance. Not only is there really no such thing as "all-risk",
but in the typical property policy, different types of property are subject
to different levels of coverage. Most companies have discontinued using the
term "all-risk".
Let's talk about the most common coverage differences in the modern
homeowner policy - the difference in coverage afforded to the dwelling and
contents.
If you bought this so-called "all-risk" policy assuming that
everything that is covered by this policy is covered by the same list of
perils, you would be mistaken. If you have a later-model home, there is a
good chance you have a homeowner policy providing the so-called
"all-risk" coverage for the dwelling itself.
The broadest of the homeowner policies provides coverage for risks of
direct physical loss, except as excluded. An example of one of these
exclusions is for earthquake. Earthquake coverage is usually provided as an
option. There are other excluded perils, such as flood and war.
Without a special endorsement, the typical homeowner policy does not
extend such special coverage to the contents of your home. Your contents are
generally covered for specific perils only. The list of perils is extensive,
but not as broad as the coverage to specific types of property.
There is a section of your homeowner policy that specifies different types
of property and their specific limits. In this section, you will find money
is limited to an amount usually around $200. Statuary, coins, arid collector
stamps have limited coverage as well. Jewelry is usually limited to $1,000 to
$2,000 for the peril of theft. There are other limitations; you should
consult your policy for specifics.
What might surprise you is that a lot of policies actually give you a
limited amount of coverage for boats, boat trailers, and utility trailers.
These are reasonable restrictions and extensions. The policy strives to
provide the best coverage for the average policyholder.
Not all policies are exactly the same. Read your policy and familiarize
yourself with all of the limitations and exclusions. Most policies are
written in easy-to-understand language. The challenge in understanding the
policy is knowing when different sections of the policy's wording work
together to grant or limit coverage. Be sure to give us a call with any
questions you may have.
