Protecting your investment
No matter how careful you are and how many safeguards you put in place, there is no way to protect yourself financially from any accident that may befall your home/property. That said, homeowner’s insurance, home warranties and other insurance policies are widely used by homeowners. They can be a wonderful safety net, but you need to be sure you’ve read the fine print; too often, something that “seems like it should be covered” isn’t. A great example is flooding. Unless you have flood insurance (which is completely separate from your homeowner’s insurance) neither damage to your property or belongings as a result of flooding will be covered.
What is covered?
Most of the time, damage caused by continual issues, as opposed to single events are not covered. For example, let’s say your roof has been slowly leaking, unbeknowst to you, for eight years into your attic and, once you realize there’s a leak, you discover there’s mold. Most insurance companies won’t cover that. Also, “normal wear and tear” items are often not covered, even if the resultant damage is. In the event of a sewer pipe back up into a basement, the cost to clean and repair the basement may be covered, but sometimes the sewer pipe, which has eroded over time, may not be. If it’s not repaired (regardless of who pays for it), you’re likely to have another back up. So be sure to be very clear with your insurance broker when choosing a policy about what it does and doesn’t cover.
Home warranties, which run about $475 a year are intended mostly for appliances and HVAC and plumbing problems. Again, certain things are covered and others are not. The motor on the dishwasher often is, but the spinning device that squirts water to the top rack often isn’t. Go figure. With those, you also have to be careful not to call your own repairman; you usually have to call the warranty company and use one of their preferred vendors.
Special insurance
Finally, in our area AQUA offers insurance on the water supply and sewer pipes that run from the house, underground, to the street. If you have older pipes, I’d advise looking into their policies to learn what they cover (I know there are caps, as well). So just a word of caution: look into the cost of insurance options, understand the coverage and caps and then do a cost/benefit analysis, all the while realizing that there is no way to remove all risk: when you own a home, stuff’s gonna happen and some of it is going to land in your lap.
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