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Homeowners insurance and the standard policy

Although there can be differences between the way the actuaries calculate your risk profile, the attorneys tend to flock together when it comes to writing down a policy. There are differences but these tend to be in the detail. To make progress, all you need do is assume the wording of the policy will never be favorable to you. Attorneys always look out for the interests of their clients. So what should you be looking for in the standard policy? In a way, this will be decided by how much you are spending. If this is a "cheap" policy, the coverage will be very limited. If you have bought a comprehensive policy, there will still be limits on what you can claim, but more situations will be covered. Nevertheless, most policies include lightning strikes, wind damage, damage caused by falling trees and similar objects, and some water damage. The problem for insurers is the need to avoid any possible liability arising from "flooding" which has grown both because of changes in the weather pattern and because more of the land is now covered in concrete and no longer drains so efficiently. So insurers exclude all water damage unless the wind or general storm conditions force the rain in.

However, a standard exclusion is for "preventable" damage. As the owner or occupier of your home, you are expected to do routine maintenance and repair work. It all depends on what damage you might reasonably foresee. So, for example, when the weather turns to winter, it's probable unprotected water pipes will freeze and release considerable amounts of water when the thaw comes. This places a general duty on you to wrap the pipes most at risk with insulating materials to minimize the risk of freezing. It's the same with checking the window and door frames to ensure there's no crack through which wind can blow water. Similarly, if snow builds up on the roof, you should do whatever you reasonably can to ensure the weight does not damage the roof itself or bring down the chimney or any other part of the structure. Whether you can insure against landslides, sinkholes and earthquakes will depend on the local geology and the amount of risk the insurers are prepared to accept.

This means the interpretation of the policy is critical in deciding how much effort you should put into prevention. Obviously, there's nothing you can do to divert a hurricane but, once you know one is one the way, you can board up the windows and make whatever other preparations seem sensible. This is not to say claims will always be rejected if you have failed in some way, but you may find the amounts paid reflect the opinion you could have done better. When the next homeowners insurance quotes come in for renewal, you may also find the rates have risen sharply. In the insurance business, no good deed goes unpunished, and as for the bad. . . Well, if the damage was worse because your property was not in a proper state of repair, the insurer might suspect you delayed repairs hoping the hurricane season would pay for all the repair work necessary. Needless to say, if your home insurance company thought your claim was dishonest, it would cancel the policy.

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