There is a lot of confusion about what an ordinary householders policy covers – all the things people think that they are covered for and are not and on the other hand, all the things they can claim for, and often do not realize they can.
Buy a householders policy which includes the building as well as the contents – otherwise a household fire could cripple your family finances for years.
Gone are the days of fine print exclusions, public opinion has persuaded insurance companies to have print no smaller than normally used in a newspaper. This has now made household insurance companies competing for the consumer dollar never more competitive.
Because of the wide variation in policies, this article is to be taken as a general guide only, raising points to check against your policy where applicable.
Do not take for granted the following points to be covered in your new policy, check first before you sign.
It is wise to check your policy’s renewal cost with what you paid last year, because the insurance company may have increased the premium “to take account of inflation”. Some companies do not make it clear that they have done this.
What is Covered?
Items people can claim for under their normal householder’s policy often do not realize they can! Your householders’ policy not only covers your home – but the entire property including the front garden and the backyard.
This means that you can claim for the theft of everything from the pot plants to the clothes hoist. Many people living in apartments, where clothing has been stolen from washing lines, do not realize that they are also covered for the clothing stolen (whether it is the depreciated or the replacement value depends on the policy).
Your car, companies consider this a different class of risk. Whether you are an apartment dweller or live in a house, you’re not covered for the theft of the car itself. Your car insurance has to be a separate policy.
Boats are also excluded from the theft protection of a normal householder’s policy. For example, you may have a dinghy stolen from the top of your garaged car at home, and not be able to claim – but, you can claim for the swimming costume, towels and beach gear which have also been stolen.
Even if the damage to household property is your fault, most policies accept this. For example, a housewife forgets about food cooking in fat which boils over and resulting in fire, damages the stove, walls, ceiling and curtains.
Important point, you are moving house and you have shifted an amount of the furniture and your belongings. If a housebreaking occurs at either your existing home, or your intended one, then you are not covered by many policies if a legalistic interpretation has been taken by the insurer. Such policies stipulate that the home is to be sufficiently furnished for full habitation. Because many insurers regard this as a “grey area”, it would pay you to notify the insurers to find out exactly how they interpret the situation. Better to find out before, rather that after a theft.
Motors.Your washing machine motor burns out. Most policies pay for the replacement motor. This also applies in the case of your household dish washing machines, refrigerator, and air conditioner even the motor of your swimming pool filtration system. Most cover electric motors in various domestic appliances.
The electronic parts of your TV, radio or stereo equipment burning out are not covered in most policies. A subtle distinction is the motor of stereo equipment, but not components such as the baffle or tweeters.
“All risks”policy usually does not cover any damage by vermin, such as moths in a fur coat, or mildew, or wear and tear. It also does not cover mechanical failure, such as over-winding a watch, or a TV or radio breaking down. Although you are able to insure separately against a TV breakdown.
The typical “all risks” policy may not cover damage occurring during, or as a result of riots or war – or any process of repair or renovation.
Some policies also exclude the breaking of glass in a watch or a scientific instrument. Whilst a wall barometer will be covered under most policies, an alarm clock isn’t for the breaking of its glass face.
“All risks” is possibly one of the greatest areas of variation, and it particularly pays to read this section of your policy’s terms and conditions before signing.
If a spark from your incinerator starts a fire which gets out of control and burns down your neighbor’s home, you’re covered under the personal liability section of most policies.
If your car hand-brake does not hold on a steep driveway and the car rolls back into the wrought-iron front gate, the insurance cover only relates to what the car hits. The damage to your car is covered under your motor vehicle’s policy.
Damage to your fence, wall or gate, you are covered virtually against anything falling from the sky. Insurers even regard disintegrating satellites as “aircraft”. Fireballs, meteorites, and other such phenomena are also usually covered.
If someone steals your fence, or a runaway truck flattens it, you’re usually covered. You are covered against theft or damage, but it’s too bad if a “fire-bug” decides to take out his pyromania on your hedge – it’s not covered.
“Storm and tempest”. People commonly believe their householders’ policy covers them for – and it does not. Storm and tempest cover does not include flood, of which is defined as, the violent and temporary escape of a large body of water from the normal confines of any natural or artificial water course such as a river, lake, canal or dam. Insurance companies look upon flood as a separate risk, and require an extra premium to specifically insure against it.
The usual exclusions in a householders’ policy include loss or damage by the sea, tidal waves, or high water. Many policies also exclude damage by rainwater – unless it enters the building through an opening in a wall or roof, caused directly by the storm.
Many policies pay if the rain water damage was caused by your down-pipe or guttering becoming blocked by leaves blown down during a storm. This is because the policy usually includes the overflowing of water tanks, apparatuses or pipes – guttering and down-pipes are normally treated as “water apparatus”.
Storm and tempest includes damage done by wind and wind-driven rain. Damage caused by a landslide due to torrential rain is not covered by many policies. Your gates, fences or retaining walls if blown down or washed away? Excluded!
Not the contents of a home freezer, should the unit itself break down, or should there be a power failure such as a blackout caused by a lightning strike on the local sub-station, or a car knocking down a power pole. However, many companies provide this cover for a few dollars a year more dollars a year.
“Crack trap”,you are shaving and you drop the razor on the ceramic basin it cracks – but not all the way through. Your claim would be rejected. Insurance companies stipulate that a fracture has to go clean through the entire thickness. In other words, it has to be a complete break. This also applies to toilet bowls, baths and fixed glass which are normally part of the furniture. For example, a dressing table mirrors.
Livestock, such as hens, are excluded. Somewhat surprisingly, so is the family dog or cat – even if they have a pedigree. They are technically “livestock” and a special “livestock” policy is required.
If you forget to lock your home when you go out, and you have been robbed, you may find you are not covered. Some policies stipulate that theft has to result from “breaking and entering”. Paradoxically, if you lock the house and then leave the front door key under the mat or in the flower-pot (as many people still do despite warnings from the police), most policies will still cover you. This is because someone who turns the key in the lock is technically regarded as just as much a thief breaking and entering as someone using a jemmy bar on the lock.
Accidental breakages of the glass in a hand mirror or the glass in a radio or TV set are not usually covered.
Light fittings, curtains and carpets are often not included in mortgage insurance policies on buildings only. Check your policy’s terms and conditions – or to remove any doubt, insure both your buildings and contents.
Insurers will not cover damage to goods caused by the normal application of heat such as an iron, blow torch or any other process – but they will cover fire that results from this heat. For example, you’re not covered if you scorch a shirt you’re ironing but if the scorched shirt sets fire to the house, you’re covered.
A burst water pipe; you are not covered for the repairs to the defective part of the pipe – only the exploratory costs to locate the leakage, plus any damage to the ceiling, carpets or wallpaper, Plus the replacement of rest of the pipe. The same situation applies to a leaking pipe from an oil heater
You finally get around to lopping that overhanging tree in your front garden unfortunately a branch falls and crashes through your roof. A claim would be rejected by most insurance companies. Policies generally stipulate that damage from falling trees, or branches,will be covered only if it is from natural causes, such-as wind.
Works of art, curios and other valuable items; generally the cover on each item is limited to only five per cent of the total cover, according to many policies, unless specifically mentioned. It’s important to read your policy to see if its limitations affect any valuable item you have.
A man knocks at your door and offers to clean your windows for a charge. He falls off his ladder and breaks a leg. Are you covered for his medical expenses and loss of earning power during convalescence? No, you need a separate workers’ compensation policy such a policy covers you virtually for an unlimited amount for your liability as an employer. Alternatively, before he commences work, you check with him whether he had taken out a personal accident policy
Your home has been robbed or damaged by fire, storm or tempest – and you haven’t notified the insurance company that you have been away from home for 30 consecutive days for example, on holiday. Your insurance protection will be void under many policies at the discretion of the insurer. (A few policies offer notification time of up to 60 days).
The contents of your home will not be covered by some policies if you rent out your home and do not notify the insurance company in writing.
You rent your home while you are on holiday. You return to find that the tenants have damaged the property, for example, a wild party. By renting, you have automatically cancelled the malicious damage protection of your householder’s policy.
It pays to do due diligence on all Insurance policies, if not you may find it very expensive.