Home Insurance Gaps In California
What Does My Home Insurance Not Cover?
I think we have all heard the saying that our home may be our largest asset. For many, if not most, that is probably a valid statement. So, it’s important to know what your home insurance does not cover and how to protect against those potential financial liabilities. California has some unique risk factors that other states don’t have, the most obvious being earthquakes and wildfires. So, home owners insurance in California can be different than in other states. Let’s take a look at some of the main risk areas that require special attention when insuring a home in California and how to avoid home insurance gaps.
Flood Loss
Unless you have a separate flood insurance policy you are not protected against flood damage or loss. Flood loss is different than water damage from your pipes or toilet which you may have claimed through your home insurance at a prior time. California has what is known as the “100-Year-Flood-Plain”. If you live in one of those areas that means you live in an area which has a higher percent chance to flood during a 100-year-storm. These storms have about a 1% chance of occurring in any given year. You can purchase flood insurance even if you are not in the flood plain to protect your assets. But you should consider all the surrounding factors of your location before making such a purchase.
Earthquake Coverage
Earthquakes are a common occurrence in California. Whether you feel it or not, it has been estimated that one occurs as often as every 3 minutes. That certainly begs the question, should you have earthquake coverage? This is more a personal choice. But, we have to consider that our home may be one of the most valuable assets we own. What are the financial consequences if it is destroyed while we still owe money on it. Or even worse, if we own it free and clear?
Your current home insurance company will normally send you an offer to insure for earthquake after you have begun insurance with them. It will usually have limited options and may not be all that competitive. There are other great options like Palomar Specialty and California Earthquake Authority available. Price and design of your policy will normally be based on how prone your area is to active quakes and or faults.
Mold Damage
Mold usually has little to no coverage in California. Although some cost may be covered in a claim, testing for mold and the actual removal of mold is often an expense that the home owner is responsible for.
Other Home Insurance Gaps in California
Other common shortfalls, which typically have little or no coverage under a standard home owners insurance policy include the following:
- General wear and tear
- Termites and or insect damage
- Rodent and bird damage
- Mudslide and sinkhole damage
Knowing this does not mean you need to rush out and find solutions today; however, it should definitely be something you review before there is an active need. To guard against other home owners insurance gaps be sure to look at our article on The 5 Worst Home Insurance Mistakes We All Make.
If you have any questions about home insurance, please don’t hesitate to contact Chris at (619) 980-7263. He will be happy to help you understand coverage limitations and how to best protect yourself against vulnerabilities to loss.
