Homeowners Insurance 101:  Understanding Your Coverage

Contact Our New Jersey Insurance Lawyers at Herold Law, P.A. to Learn More.

Understanding the extent of your homeowners’ insurance coverage is crucial.  This knowledge can guide you in purchasing the right coverage, potentially saving you from unexpected surprises in the future.  However, it is worth noting that dealing with an insurance company over a large claim can still present challenges.

What Is Covered in Your Policy?

In a homeowner’s insurance policy, you pay the insurance company premiums in exchange for coverage.  The insurance company assumes the risk of something happening to your home or what is inside it.  Your policy would usually cover the following:

  • Your actual dwelling;
  • Other structures on your property;
  • Your personal possessions inside your home (subject to certain limitations); and
  • Damage that you may have caused to someone else on your property.

The insurance company has priced the risk because they would be obligated to pay for your damages up to the policy maximum, assuming that what happened was covered by your policy.  Generally, the more things that are covered by the scope of your Homeowners Insurance Policy, the more the insurance company would charge for it.

Before you even think about filing a claim, it is essential that you have a comprehensive understanding of your coverage.  Rest assured, the insurance company is well-versed in your policy details, and they will not hesitate to reject a claim they believe falls outside its scope.

The Damages Must Be Covered by Your Policy

Your insurance policy is a contract between you and the insurance company.  If the damage you have sustained falls within the scope of the policy, the insurance company is obligated to cover it up to the policy limit. Every word in the insurance policy matters because it is contractual language.

Your Homeowners Insurance Policy will affirmatively state what damages are covered.  The insurance company will invest a great deal of effort into making the coverage as straightforward as possible.  They know they are the ones who, having drafted the contract’s language, would have any ambiguity in the document construed against them.

There May Be Policy Exclusions That Apply to Your Claim

Many of the details are found in the policy’s fine print.  Any insurance policy will contain several exclusions that limit what the insurance company must cover.  You may need to purchase a Rider or pay more if you want a policy without these exclusions.  For example, homeowners’ insurance policies almost always exclude flood damage.  You would need to purchase specific flood insurance coverage.  Other common exclusions from homeowners insurance include:

  • Earthquakes;
  • Water damage;
  • Intentional loss;
  • Power failure;
  • Wear and tear; and
  • Explosions

Your insurance policy may be completely different from that of another homeowner.  When purchasing the policy, you would generally determine what you want to be covered.

You May Need to Fight the Insurance Company in Court

Never assume the insurance company will cover everything when you file a claim.  The insurance company may very well deny your claim entirely, or they may offer you less than you believe that you deserve in damages.  If you have a large claim, it makes sense for you to hire an attorney early on because they will deal with the insurance company on your behalf.  In some cases, you may need to fight the insurance company in Court because they will refuse to pay you what you believe they owe.

Contact Our New Jersey Insurance Lawyers at Herold Law, P.A. to Learn More.

Our New Jersey insurance Lawyers at Herold Law, P.A. will help you with a difficult claim, whether assisting with preparation or challenging a denial in Court.  The first step is to speak with an experienced lawyer to learn about the process and your options.  You can schedule a consultation with one of our attorneys by calling us today at 908-679-5011 or contacting us online.  Located in Warren, New Jersey, we work with clients in Somerville, Morristown, and across New Jersey.