Insurance Coverage – What’s Covered and What’s Not?

If you drive a car, own a home or operate a business, you need to have insurance coverage in place to protect your interests. But simply having insurance is not enough – you also need to know what the policy covers and what it does not. Car insurance, for instance, provides protection from liability in the event of an accident deemed to be your fault. If you carry comprehensive and collision coverage on your car, repairs to the vehicle will be covered as well. Homeowners insurance is designed to protect your property in the event of a fire or other disaster. The policy will also cover injuries to your visitors and provide liability protection. Knowing what your insurance policies cover is important, but understanding the exclusions and limitations of your policy is just as important. Here are some key things you need to know about what insurance policies cover – and what they do not.

Your Car Insurance Will Not Cover an Unlicensed Driver

If you let your friend borrow your car, you better make sure that person has a valid driver’s license. Your insurance company will deny coverage if an unlicensed driver crashes your car or causes an accident. Your insurance company may also not cover the commercial use of your car. If you plan to use your vehicle for business or set up your own taxi service, you need to call your agent and make sure you are covered.

Flood Damage is Not Part of Normal Homeowner Coverage

If you own a home in an area prone to flooding, you need to look at buying separate flood insurance. Ordinary homeowners insurance does not typically cover flood damage, including water damage from hurricanes. The cost of flood insurance varies widely, so it is important to check the prices in your local area. In some places there are subsidies available to make flood insurance more affordable, but no matter what the cost living without flood insurance can be very risky.

Your Health Insurance Policy Has a Number of Exclusions

Even if you have great health insurance, the policy probably does not cover everything. Health insurance coverage typically comes with a number of exclusions, so you need to read the fine print carefully and know what it says. For instance, most health insurance policies do not cover surgeries deemed to be cosmetic in nature, like nose jobs and breast augmentations. The insurance company may also restrict coverage for experimental treatments and drugs that have not been approved for your condition.

Termite Damage May Not Be Covered

If you have a termite infestation and fail to notice the warning signs, you could be out of luck when you file a claim for the resulting damage. Chances are your homeowners insurance includes language that denies payment in cases of negligence, and failing to notice a termite problem will probably fall into this category. It is important to have your home checked regularly for termites, carpenter ants and other pests that could put your home at risk. Finding and fixing the problem early can protect your investment and help you avoid larger problems in the future. Knowing what is and is not covered by your insurance is essential. Whether you are shopping for homeowners insurance, car insurance or health insurance, you need to understand the exclusions and make sure you have the protection you think you do.  

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