Can You Buy Home Insurance and Be Unprotected?

Homeowners who do not review their insurance needs after their mortgage is approved may be in for a rude awakening if disaster should strike: they may discover that they are unprotected because the amount of home insurance they have is not enough. The home insurance policy that was used to approve your mortgage is only enough to pay off the loan, not replace your valuables or rebuild your home.

Every home insurance company has different standards for their coverage and what they exclude from the coverage they provide in a standard policy—it's up to the homeowner to know what their policy says and what coverage they need by analyzing their home and possessions accurately.

All homeowners need to read the fine print of their policies to be sure that they have the level of protection they need in the event of a disaster; don't assume that your policy covers your home in case of fire, storm or flood, the list of exclusions in standard home insurance policies changes frequently. Take a look at your property, make an inventory list of your personal property, and make note of the irreplaceable or extremely expensive items you own. Remember to consider all of the factors; the members of your household, pets and additions to your home that may increase your liability like an in-ground pool.

Here are two of the things that your home insurance policy may exclude from coverage:

Acts of Terrorism or War: Before 2001, home owner's insurance policies did not exclude acts of war or terrorism, but unfortunately seven years on this exclusion is becoming more common. You should discuss what type of coverage you need to protect yourself if your home is destroyed by a terrorist act.

Flood Damage: In 2005 the United States was ravaged by several powerful hurricanes which proved to be a bitter lesson for many residents in the southern states that were hit the hardest and thought that their home insurance provided flood damage protection when it does not.

Homeowners should consider purchasing flood insurance to protect their homes from water damage that may not be included in their home insurance policies as well as in the event of a major catastrophe: this is a separate policy from your home insurance. The cost of flood insurance is the same everywhere in the country; the policies are issued by private insurer and backed by the federal government.