Homeowner's Insurance Policy May Not Be What You Expect

March 22, 2012

Homeowner's Insurance Policy May Not Be What You Expect

Unlike car insurance, people are not required to carry homeowner's insurance, although many banks and mortgage lenders require the purchaser to have insurance to protect their investments. Individual states monitor insurance companies, regulating them to ensure that they can pay claims to policyholders and that they conduct themselves lawfully and fairly.

This means the vast majority of homeowners are insured and protected against such unlawful practices as conducting business in bad faith. But what are homeowners insured against? Who is responsible to ensure that the policy is correct and up-to-date? The answers might surprise you.

Responsibility on Policyholder

For example, one realtor recently experienced some of the unpleasant surprises that can come from not fully understanding your homeowner's insurance. Her husband had passed away, her daughter had moved to another state and she didn't know if her husband had told their insurance agent that the basement was in the process of being finished.

She called her agent and reported all three changes. The agent said she would "handle it." When the policy came up for renewal a few months later, the realtor paid without reading the details of the coverage. When shortly after her sump pump malfunctioned, she was surprised to discover she did not have coverage. The reason, she believes, is because sump pump coverage is a low cost to the policyholder but can bring about large claims paid out. Thus, the agent never brought up the fact that the policy did not include sump pump coverage.

Ultimately, it is the policyholder's responsibility to know his or her coverage. In this case, the realtor ultimately had to contact an attorney regarding her agent's negligence.

Insurance Dispute?

Insurance companies protect their legal interests with what often are teams of attorneys. If you are in an insurance dispute, an attorney experienced with protecting policyholders can protect your rights and interests to ensure you are properly paid out according to your coverage.

Article provided by Rutter & Russin
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