Posts Tagged ‘Home Insurance’


Homeowners Insurance Options Revisited

by Ziva Beck in Home Ownership, Insurance

Over the past several months, mother nature had several surprises for us. It started with a 5.8 earthquake originating in Virginia. Here I was sitting in my living room and suddenly the whole house was shaking. A week later, came the powerful hurricane Irene that caused flood damage to so many houses. And the recent snow storm in October knocked down power for over 1,000,000 households in New Jersey. We also lost power for over 5 days.  What an experience!

I decided to take a closer look at our home insurance policy to find out what is covered and what is not covered. It is not an easy task and there are many exclusions. After speaking to our insurance agent and a claim adjustor, I made several important adjustments to our policy in key areas of coverage.

Earthquake Coverage – Regular policy does not provide any coverage for that. I know the probability of having an earthquake in New Jersey is very low. Because no one expects it, the cost of earthquake coverage for home owners in New Jersey is very reasonable. It was under $100 for a year for our house. I decided to add it to our policy for the extra peace of mind.

Flood Coverage – Regular policy does not provide coverage for that.  It is usually expensive and is required for homes in flood areas. For homes not in the flood area there is a less expensive option. For our house it was about $350 per year. Still, it will increase our insurance premium by more than 40%. Given the extensive flood and water damage caused by hurricane Irene, it can be a good option. Our house doesn’t have a history of water damage but no one can predict the future. For now, I haven’t added it to our policy.

Hurricane Deductible – There is a regular deductible and then there is a separate deductible for hurricanes. My original policy had a very high deductible for hurricanes, about 2% of the insured value, which would translate to thousands of dollars. This was an unpleasant surprise to many homeowners after hurricane Irene. The state of New Jersey issued a one time exception regarding the high deductible for damages due to Irene . I decided it was worth while to pay the extra premium and have only a $500 deductible.

Power Failure – We have lost power for more than 5 days during the snow storm in October, 2011. After trying to live in the cold house without electricity for 3 days, I have reached my limit and decided to stay in a hotel. I wanted to know if our insurance will cover the stay. There was no easy answer. I had to reach a claim adjustor to get an answer. In our case, we were covered and were pleasantly surprised that the insurance offered assistance in finding a hotel and even making a reservation. This was a big help since we had no access to the internet and most hotels were booked. Kudos to everyone who helped us!

Home insurance policies are not easy to understand and have many exclusions. It is important to review it with your insurance agent and decide on best coverage options for you.

NJ Department of Environmental Protection assesses the risk of earthquake in New Jersey