Additional Coverages And Endorsements

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Flood insurance — If you have a federally backed mortgage and live in a high-risk location, you are required to carry flood insurance. However, you should consider buying flood insurance no matter where you live, since flooding can occur quickly in the event of melting snow or heavy rainfall. Many individuals think the federal government will cover their flood losses. Federal disaster assistance only takes effect if the president formally declares a disaster. This consists of low-interest loans that must be repaid.

Mold coverage — Some policies include limited mold coverage caused by specific perils.

Earthquake coverage — This coverage provides financial protection from the shaking and cracking that can destroy buildings and possessions (damage caused by resulting fires or explosion is covered under homeowners policies). Earthquake coverage can be purchased through private insurers or, if you live in California, you can buy a policy from the California Earthquake Authority (CEA) through a licensed, authorized provider.

For more information on earthquake insurance, contact your insurer. Information about earthquake coverage in California is available by phone at (800) 927-4357 or online at www.insurance.ca.gov.

Windstorm, hurricane and tornado coverage — Homeowners policies generally cover damage caused by windstorms, including hurricanes and tornadoes, unless you live in an especially high-risk coastal location. Because of the higher-than-average risk of damage, you might be required to buy a separate windstorm policy through a state-run insurance “pool.” Storm surge is not covered unless you have flood insurance.

Computer coverage — Homeowners policies generally provide only a limited amount of coverage for computers, printers and fax machines. You may want to consider buying an endorsement or rider to provide broader coverage, or a separate business policy if you work from home.

Extra replacement cost coverage — If you live in a natural disaster-prone location where rebuilding costs can increase following widespread disaster, you might want to consider buying extra replacement cost coverage. This option provides additional coverage beyond the policy limits of your regular homeowners policy. Some insurers also offer extended replacement cost coverage, which caps the extra coverage at a certain percentage of your homeowners policy.

Besides the major coverages outlined in the preceding pages, some insurance policies include a variety of other minor coverages at no cost. Because these coverages are limited, you should determine whether your insurer offers more extensive coverage through an endorsement.

• Debris removal. Pays a limited amount to remove debris after a covered loss.
  
  
• Additional living expense (ALE). Pays increased living expenses for a specified time while your home is being repaired or rebuilt following damage by a covered peril.
  
  
• Prohibited use. Reimburses you for meals and lodging if you have to leave your home by order of civil authorities due to direct damage to neighboring areas that was caused by a covered peril.
  
  
• Landscaping. Covers damage to trees, shrubs and landscaping caused by covered perils.
  
  
• Loss assessments. If you are a member of a homeowners, condominium owners or co-op owners association, you may be asked to help cover losses to common property or personal liability that are caused by a covered peril.
  
  
• Lock replacement. Pays a certain limit to replace, change or rekey door locks if your keys are stolen.
  
  
• Refrigerated products. Replaces refrigerated or perishable items that spoil because of a power failure or mechanical breakdown.
  
  
• Glass breakage. Pays for broken glass or damage caused by breaking glass.
  
  
• Landlord’s furnishings. If you rent a room or apartment in your home, your policy may pay a limited amount to cover your furnishings or property in those areas for certain perils, but not theft.
  
  
• Building ordinance or law. Provides coverage to repair structural damage or rebuild your home under stricter building codes and ordinances.
  
  
• Reasonable repair. Reimburses you for temporary repairs made to protect your home or its contents from further damage after a covered loss.
  
  
• Inflation guard clause. Some policies automatically increase coverage to help keep up with inflation. You should not place total reliance on automatic increases.
  
  
• Identity theft, credit card, forgery and counterfeit money. Generally, this insurance covers the incidental fees of attempting to correct information on your credit history, including:
  • Fees to reapply for loans that were rejected because of incorrect credit information.
  • Costs to notarize affidavits and other documents to prove your innocence.
  • Expenses associated with certifying and receiving receipts for mail sent to clear your credit.
  • Charges for long-distance phone calls regarding identity theft.
  • Lost wages on days you had to be away from work to clear fraudulent activity.

The USAA Educational Foundation’s publication, Identity Theft, offers more information.