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Don’t Assume Earth Movement Coverage Is Standard In Your Home Insurance

 

While home insurance policies are sometimes known as “all-risk” policies, they do not always cover all risks that may cause damage to your home. One of the more commonly excluded perils on most policies is earth movement, which includes earthquakes. The reason it’s called “earth movement” is that the exclusion itself is much broader than just earthquakes. Many types of shifting or moving earth are not covered by your policy, and you may be surprised to find that some of these cannot easily be insured, no matter how much premium you may be willing to pay. Earth movement coverage is not something that is needed in California alone.

Earth Movement Exclusions

The standard home insurance policy’s definition of excluded earth movement includes sinking, rising, shifting, and the expanding or contracting of earth. And all of these exclusions can be combined with water or not. This means if you think of earth movement only in terms of earthquakes and other seismic activity, you are missing some key exclusions that can cause substantial uninsured damage to your home. Let’s look at each of these excluded movements in a little more detail:

  • Sinking – If the ground under your home settles, it is generally defined as sinking. This can be the result of many factors, such as erosion due to water or poor compaction when the home was built.
  • Rising – The opposite of sinking, if the soil under your home rises, bulges, or heaves, it will cause damage to your foundation and the house itself. While water can cause erosion, too much water in the soil can also cause it to expand.
  • Shifting – With sinking and rising covering the vertical movement of earth, shifting covers the potential lateral movements that will also impact your home.
  • Expanding – As if rising earth was not broad enough of an exclusion, the policy includes expanding earth as an additional exclusion. These exclusions are similar to each other, but the redundancy of the policy exclusion leaves no ambiguity of its intent to exclude earth movement damages.
  • Contracting – Sinking earth is similar to contracting earth, but as with expanding and rising earth, the home insurance policy seeks to broaden its exclusions, allowing no room for potential coverage.

The earth movement exclusion includes all of the above directions in which the earth can move and cause damage that is not covered by your policy. In addition to these definitions, the policy also excludes the following types of phenomena that are more commonly understood: earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, erosion or movement resulting from improper compaction, site selection, or any other external forces. Additionally, the policy further excludes earth movement resulting from volcanic explosion or lava flow.

Essentially, virtually anything that causes your house to move or shift is excluded by the home insurance policy. However, direct fire caused by any of the above is usually still covered. For example, if a mudslide moved your house several inches and severed a gas line, which then resulted in a fire, the loss of your home due to fire would be covered. However, if the movement resulted in a cracked or shifted foundation, those specific damages would still not be covered, as the foundation is not a loss resulting from the ensuing fire.

Getting Coverage for Earth Movements

Unfortunately, many homeowners recently found out just how far-reaching earth movement exclusions can be after Hurricane Sandy. Even those who had purchased flood policies were still uninsured because their flood policies contained exclusions for earth movement, even if they were caused by floods. The Insurance Journal reports that the State of New York is now using some of its emergency funds to help the affected homeowners. But homeowners cannot always rely on a governmental agency to step in on their behalf if they are not properly insured.

To avoid many of the earth movement exclusions, homeowners can purchase insurance that will add the coverage back to their home insurance policies, or they can purchase separate policies separate from their existing policies. In some states, insurance companies may even be required to offer you the option of purchasing earth movement coverage.

For instance, in California, insurance companies selling home insurance policies must offer earthquake coverage to their customers, though customers do not have to elect that coverage. But this is helpful in that it reminds homeowners that they must make a conscious decision to accept or reject coverage.

Much like national flood insurance policies, California earthquake insurance is available through a special agency set up to handle the unique risk. Insurers in California can choose to offer the coverage through their own resources, but the majority elect to participate in the California Earthquake Authority (CEA) program for insurers. If you are a California resident and elect to purchase coverage from your home insurance company, it’s possible they are still providing the coverage to you through the CEA. However, you have issued a policy directly from your insurer.

Specialty Exclusions Homeowners Should Understand

Even with agencies such as the CEA setting up special programs to cover earth movement, there are still some circumstances under which no policy will insure a loss. A common example of excluded earth movement is loss due to a manmade condition. Insurance companies are particularly uncomfortable with these risks because they are unpredictable, and therefore difficult to underwrite. So even though no one can really predict an earthquake, scientists do have some information about where faults are located and therefore the expected severity of damages. This amount of data assists the insurance companies in modeling potential losses and helps them to set what rates to charge.

However, with manmade conditions, it’s impossible for the insurance company to foresee when such an activity might take place. The most common types of manmade earth movement are those from nearby construction activity. In these situations, your only recourse is usually to pursue a liability claim against the party responsible for causing damage to your home. While that process is challenging and not nearly as straightforward as a first-party home insurance policy, it’s certainly better than no recourse at all. If you have a particularly valuable home, you might be able to find an insurance agent that has the ability to access Lloyd’s of London, where virtually any risk can be insured – albeit for a price.

Earth movement is an inescapable risk facing all homeowners and there is limited insurance coverage available. Before making any assumptions about what is or is not covered, you should carefully read your policy. If you are concerned about the lack of coverage, ask your insurance company or agent about buying back some of the excluded coverages. In the event of a catastrophic loss, you will be glad you did.

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Home warranty vs. home insurance: What you should know

As a homeowner, it’s always a good idea to protect your home from expensive damage or loss, whether it’s caused by extreme weather or daily wear and tear. Investing in both home insurance and a home warranty plan is essential, as they cover different things. 

Why do you need both plans and how do they differ?  

Home insurance policies
The main difference between a home warranty and home insurance policy is what they cover. Home insurance is often mandatory when homeowners buy a new house. The bank will usually require you to purchase a policy before issuing a mortgage and keep it for the length of the mortgage.

Home insurance covers four primary areas of the home, including personal property and general liability if someone were to be injured on your property. In addition to theft, home insurance policies will only cover costs for damages caused by perils like fires, floods and other natural disasters. 

If your basement were to flood due to a storm or an earthquake were to ruin the structure of your home, an insurance adjuster would come to your house and fill out a claim for repair of any damaged belongings. After the claim is approved, your insurance company issues you a payment after subtracting the amount of your deductible from the total balance to cover the cost of the repair. 

Home warranty plan
While home insurance policies are usually required for homeowners, home warranties are not mandatory. However, because insurance policies don’t cover costs when home appliances and systems break down from normal wear and tear, you can save yourself a lot of trouble and money by investing in a warranty plan. Unfortunately, things like your A/C and washing machine breakdown –and when they do they’re expensive to fix.

A home warranty is a plan to help cover the expense of repairing or replacing appliances and home systems when they fail due to normal, everyday use. Warranties generally cover essential items in the home such as your plumbing and electrical systems, major appliances, HVAC system and washer and dryer. 

“You can choose the deductible that works best for you.”

Similar to home insurance, there are different pricing options available. You can choose the deductible that works best for you. When something breaks down, simply file a claim online. CseZone will connect you with a pre-screened service provider in your area who will visit your home to diagnose and remedy the problem. Your deductible should cover the repair cost, even if the item needs to be replaced.  

While a home warranty plan and your insurance policy can protect your home in different ways, both give you peace of mind that your home and budget are taken care of when even the most unexpected problems arise.

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What Home Insurance Companies Don’t Tell You

Home insurance companies don’t always tell you everything you need to know. If this means that as you look for home insurance in Oklahoma City, OK, you need to do your due diligence. It will allow you to get the insurance policy that will give you peace of mind throughout the year.

Basic Policies Don’t Include Everything

Every home insurance policy will cover protection to the home, your belongings, and liability. However, a basic policy may not cover the full extent of your belongings, such as if you have expensive artwork or art collector of something. At CseZone Home Insurance, our insurance agents will take the time to learn more about you and your home in order to build a more customized policy so that it does include everything needed to provide financial protection.

Not All Claims are Accepted

When you file a claim with the insurance company, is not automatically accepted. Often, research will be done in order to determine whether everything happened the way you said it happens or it additionally if you don’t have the coverage within your policy, you would be financially responsible for everything.

Deductibles Vary

Just as with every other type of insurance, you will have to pay a deductible before the insurance company pays anything. Deductibles can vary from policy to policy. This is why it’s important to know what yours is so that if you need to file a claim, you know how much you will have to pay out-of-pocket.

There are plenty of things you should ask when you are seeking home insurance in Oklahoma City, OK. The more you know, the easier it will be to develop a better home insurance policy. If insurance companies aren’t disclosing everything, it is within your right to ask questions and learn more about what is being offered to you. Contact Us today to learn more about home insurance policies.

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How to Reduce your Risk of Water Damage

Water damage is one of the leading causes for personal property insurance claims in Ontario. Learning how to deal with preventable water damage is essential for everyone who lives in Ontario.

Water damage has surpassed fire as the leading cause of personal property claims in Ontario.

The challenge with water is that even the smallest amount of water can be a major headache, resulting in the homeowner having to claim under their personal property insurance. Intact Insurance classifies water damage as the following; flooding, broken pipes, sewer backup, and leaky plumbing.

Protecting your home from water damage

Since water damage is so widespread throughout Ontario, it’s important that you inform yourself and ensure you have the coverage you require to protect your home. Speak to your insurance broker to confirm what your insurance coverage protects and adjust if necessary. Furthermore, we suggest contacting your local municipality to find out if there are any special programs that may be in place to protect your home against water damage. 

Reducing your risk with preventative tips

We cannot control Mother Nature; however, we can implement preventative tips to help reduce our risk of having unwanted water in our home. The following checklist has been adapted by Intact Insurance.

Tips for Preventing Water Damage outside your Home

  • Clean eaves troughs and downspouts to ensure proper drainage
  • If you have any damage on the outside of your home (including cracks, etc.) repair them
  • Ensure you caulk window trim and door frames
  • Check your roof and flashing for repairs
  • Install weather stripping on exterior doors and windows
  • Winterize your pool or hot tub
  • Turn off the water supply to outdoor taps after the taps have been left open to drain completely. Leave the taps in the open position until the spring
  • Always clear snow away from the foundation of your house

Tips for Preventing Water Damage inside your Home

  • Check heat-duct and water pipe insulation
  • Inspect any washing machine and dishwasher hoses for cracks or leaks, and clean the filters
  • Water shut-off valve - learn the location of it and learn how to use it
  • Have the furnace and air conditioner professionally serviced annually
  • Have any chimneys cleaned annually and repaired as needed

We’d love to help you navigate water damage prevention - Contact Us if you have any questions or would like a no obligation CseZone home insurance quote. 

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