Sometimes things are open to interpretation, and reading the wrong meaning of something can cost you a lot. For example, if you have all the risks Homeowners insurance Politics, you might assume that “all” means that everything is covered. You will be wrong.
Essentially, home insurance issuers write two types of policies: named risk versus all risk (also called open risk by some insurance companies). Here’s how they differ.
Homeowners insurance against specific risks
Homeowner’s insurance for specific risks only covers what is specifically stated on your policy. If it doesn’t say you’re covered for vandalism or backed sewer damage, you’re not.
Insurance for all homeowners from risks
Homeowner’s all-risk or open-risk insurance covers everything except what is specifically excluded in your policy.
Flood insurance and earthquake insurance are common examples of so-called hazard policies. These two natural disasters are usually excluded from most open risk policies, although they can be purchased as add-ons (or passengers) for an additional fee.
What is the best homeowner’s insurance, specific risks vs. all risks?
If you are paying off a mortgage, you really have no choice but to take at least open risk. The lender will require you to follow a comprehensive policy to protect their investment. But depending on where you live, it may be wise to add additional coverage for the natural disasters that are most likely to hit you. By the way, flood damage is another industry term that you might misinterpret and wrongly assume that, since you live in a desert, you don’t need to. Since most standard open risk policies specifically exclude flood claims, you may be left with a bag for any damage from surface water that builds up after heavy rains, underwater springs, groundwater, burst water pipes, overflowing toilets, and driven winds or waves. Water.
Some other terms that may be open to interpretation and that you should clarify are: falling objects, ground movement, and animal damage. The falling object may include a meteorite or aircraft debris, or it may not be. Earth movement probably doesn’t include landslide damage, even if it was caused by an earthquake and you have this type of coverage. Animal damage coverage may mean you’re covered if a stampede of raging cattle or raging bears damages your property, but it probably won’t extend to a dog chewing drywall.
In a world where strange accidents happen and people tend to sue rather than forgive, the wider the homeowners’ insurance coverage, the better off. Just be sure to read the fine print, ask lots of questions and get written clarification.