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Myths of Full Insurance Coverage

tf-4In over thirty years in the insurance claims industry I have had many people tell me that their loss had to be covered because they have “full coverage”. When I asked them what that means, they said when they bought the policy the agent told them that it would cover “everything.” The myths of full insurance coverage live on across the board.

Unfortunately, no matter how much you pay for your policy and how many additional coverages you buy, there is no such thing as “full coverage”.

The purpose of the insurance on your home is to protect you in case of sudden and accidental damage to the home. That means that if shingles are blown off the roof causing it to leak, the resulting damage will be covered. On the other, if your roof is old and gradually starts leaking because of deterioration, it would not be covered.

Water damage is probably the most confusing damage because most causes are excluded on policies. Seepage, water runoff and other flooding is specifically excluded so you may experience significant water damage to a house and find out that it is not covered on your policy…even if you believe that you have “full coverage”. Slash Your Home Insurance Premiums. Search for Lower Rates

Why don’t policies provide “full coverage”? Your homeowners policy was never intended to be a maintenance policy on your house. Water damage in a house can be caused by a variety of reasons but they are mostly the result of age and has developed over time. They simply are not covered on your homeowners policy.

I have had people walk me through their house showing me water damage to a ceiling and buckling on a floor near a sliding door and expect me to pay for repairs. When asked when the damage occurred there was never an answer because it had been going on for a while. The argument for paying was that they had “full coverage” and it should cover any damage to their home.

Houses require maintenance and lack of maintenance results in damage to your house. Even if you believe that you have the best homeowner policy available, the damage may not be covered. Is that right?

Depending on your understanding of home ownership, you accept that repairs and maintenance are part of owning a home. It’s the same as knowing your car needs oil changes and tuneups.

If your car won’t start because your battery is dead, you wouldn’t make an insurance claim because it is just car maintenance. When you find a small leak around a window, you should arrange to have it repaired because it is part of the maintenance of your home.

When you buy an insurance policy, listen carefully to the agent. They will tell you what is covered on the policy but remember that no matter what you want to hear, there is no such thing as full coverage.