Property & Auto Insurance
Special Types of Property Insurance
When it comes to protecting your home and your property, sometimes traditional homeowners or rental insurance isn’t enough. Especially if you live in an area that is prone to earthquakes, floods or have a special situation such as a business that you own, you may need to consider getting additional insurance coverage.
Identity theft is another situation where you may want to consider additional coverage. You may also have valuable possessions, such as jewelry, that may need additional coverage. Whether you need extra coverage or not, it’s a good idea to make sure you understand what types of coverage your current property insurance covers either by checking with your insurance agent or your insurance company.
THINGS TO KNOW
- Property damage from earthquakes and floods isn’t covered under most policies.
- Identity theft coverage will cover costs related to restoring your identity.
- Valuable items such as jewelry will need special insurance riders to be covered.
Earthquake insurance isn’t usually included in homeowners or renters insurance policies. Earthquake insurance covers damages to a home and contents that are caused by earthquakes. However, other related damage, such as flood damage related to an earthquake, might not be covered.
The cost of earthquake insurance is highest in areas that are most prone to earthquakes, such as California. Like all types of insurance, an earthquake insurance policy will have a deductible. The overall cost also depends on the age of a house, the type of construction, and other factors. Some insurance companies offer earthquake insurance; in other cases, special agencies, such as the California Earthquake Authority, provide coverage.
Most property insurance companies that provide homeowners or rental insurance coverage don’t provide flood insurance. You can obtain flood insurance through an insurance agent from the National Flood Insurance Program or a private company. Flood insurance typically isn’t as comprehensive as traditional property insurance. Flood insurance will also carry a deductible.
For example, coverage for basements and items stored in basements is limited. Temporary housing for your family during and after a flood isn’t covered, and if your car is damaged in a flood, that isn’t covered either. If you live in an area prone to floods and have a mortgage on your home, your mortgage lender may require you to purchase flood insurance in addition to your regular property insurance. If your home is paid off or if you live in an area that has moderate or low flood risk, you can get flood insurance, but you don’t have to.
Business Property Insurance
If you own your own business, especially if that business has a separate location from your home, you should consider business insurance coverage. Many business property insurance policies will cover damage from a wide variety of causes. If you do operate a business out of your home, your homeowners' insurance will likely not cover losses to your home-based business if you have a claim.
Similar to other types of coverage, the level of coverage and deductible will depend on how much coverage you need and what types of coverage. You may also want to consider additional business coverage, including business interruption coverage or liability insurance.
Other Special Kinds of Insurance Coverage
Other types of insurance coverage you may want to consider include identity theft coverage and special riders to cover valuable objects, such as jewelry or art. Identity theft coverage, contrary to popular belief, will not reimburse you for funds that are stolen as a result of an identity theft incident. Instead, it covers the costs involved if you have to restore your identity after an identity theft incident. This may include attorney’s fees, lost wages, and certified mailing and notary costs. Some identity theft insurance coverage provides credit monitoring services and will alert you if a suspicious incident occurs.
You may want to pay for an additional rider or riders on your insurance policy to cover jewelry or valuables that aren’t typically covered under most insurance policies. Many policies limit losses on jewelry or other special items to $1,500 or $2,500 for all of those special or valuable items. To obtain that coverage, you usually must get an appraisal and insure it for that amount. Typically, coverage isn’t very expensive.