You know after the recent torrential rains, some of us wondered about flooding.  The problematic part of that is that if you’re worrying about flood damage when you don’t have flood insurance, you might just be too late to get it.  While it appears that we’re past the danger of flooding from the atmospheric river that pummeled us recently, here’s the top 3 things to know about homeowner’s insurance that you might not have known.

1. Generally speaking, flood insurance requires a 30-day waiting period before it goes into effect.  The rates are governed by the government flood program (FIMA which is part of FEMA) and may only be purchased through a licensed insurance agent.

2. Just because your coverage limits match when comparison shopping, does not mean you are getting the same coverage! What you should be comparing is if you have an HO3 or an HO5 policy.  The difference is that the HO3 is the minimum coverage you must have when obtaining a mortgage.  HO3 coverage is limited to a list of causes or in insurance lingo (Named Perils).  The list looks like this:

  1. Theft
  2. Fire or Lightning
  3. Explosion
  4. Smoke
  5. Freezing
  6. Vehicles
  7. Falling Objects
  8. Volcanic Eruption
  9. Windstorm or Hail
  10. Riot or Civil Commotion
  11. Damage caused by Aircraft
  12. Vandalism or Malicious Mischief
  13. Damage due to weight of Ice, Snow, or Sleet
  14. Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
  15. Sudden & Accidental Damage from Artificially Generated Electric Current
  16. Accidental Discharge or Overflow of Water from Plumbing, Air conditioning etc.

According to Scott Gelbke of Farmers, the higher coverage of HO5 removes many of the limitations of the HO3 coverage plus, you don’t have to prove that your loss was a result of one of the listed perils.  HO5 includes a higher limit for jewelry and automatically includes replacement cost coverage on contents.  It matters when something weird happens like this scenario:

While a family was away on vacation, a deer charged through a sliding glass door at their home. The injured animal proceeded to destroy virtually everything in the living room and kitchen including the furniture, television, and appliances.

The loss was fully covered under the homeowners’ HO5 policy. An HO3 would have had this homeowner paying out of pocket to repair and replace their belongings. While this isn’t a likely scenario, it illustrates the reason we carry insurance.  Namely that there exists an amplitude of possibility that your peril may be as yet, unimagined.


3. Again, thinking back to the recent storms…If a tree falls on your house, is it covered?  “It depends”, says Scott. A homeowners insurance policy typically protects your home and other structures, such as a fence or shed, against loss if they are from one of the 16 named perils. Covered perils typically include damage caused by wind. So, the situation that caused the tree to fall is important. If the tree was otherwise healthy and toppled due to wind, a typical homeowners insurance policy may help pay to repair damage to your home or other structure on your property.

However, homeowners insurance usually won’t cover a loss caused by negligence or a maintenance-related issue. So if the tree was rotting and ready to fall down before the storm, homeowners insurance likely would not cover the damage the tree caused to your home. 

So while we hope that we never have to file a claim, it’s good to know a little bit more about your policy before you have to use it!  While it’s never a bad time to review your coverage and insurance needs, there are some significant events that should cause you to review coverage with your agent.  When you:

1. Put on an addition to your home.
2. Start a business from your home.
3. Make a major purchase (jewelry or a computer).
4. Buy other residential properties for rental or as a vacation home. 

I hope you’ve found this helpful. Feel free to reach out to Scott Gelbke if you have questions or to me if you have some additional comments.