Is special homeowners insurance coverage ever needed?

Special coverage for homeowners

Basic homeowners insurance does not provide coverage for every type of event that could cause damage to a home or property. It also does not provide coverage for the replacement cost for every item a homeowner possesses.

Damage caused by earthquakes is not covered in standard home insurance policies. Homeowners in earthquake-prone areas need to purchase special earthquake insurance in order to be paid for losses caused by an earthquake.

Floods are another disaster not covered in standard home insurance policies. Homeowners who live on floodplains or in flood-prone areas need to purchase special homeowners insurance flood coverage.

Umbrella policies add protection for things that are not included in the basic homeowners policy, like a swimming pool or other high-risk items. These types of special insurance coverage can be expensive, but well worth the cost in the event of a claim.

Basic homeowners insurance may not cover the full cost of some expensive items inside a home – like jewelry, fine art, furs, or other precious items. For these items, a homeowner has two choices, to raise the liability limit on the basic insurance policy or to purchase a special policy to cover the items.

The additional policy (called a rider) requires appraisal of the items and provides the broadest protection, as it covers items if they are lost, stolen, or damaged in a disaster.