Extended Coverage

Examples§

1. Golf Course Adjacent Home: A homeowner who lives next to a golf course may discover that their standard homeowners’ insurance policy does not cover damage caused by errant golf balls. An extended coverage policy can be obtained to cover such specific damages.
2. Flood Damage: Standard homeowners’ insurance typically does not cover flood damage. Homeowners can purchase extended coverage to protect against this risk.
3. Earthquake Protection: In areas prone to earthquakes, standard insurance policies might exclude coverage for earthquake damage. Special earthquake insurance can be added as extended coverage.
4. Personal Property Theft: While basic policies may cover theft from within the home, extended coverage may include protection for personal property stolen from elsewhere, such as a car.
5. Mold Remediation: Standard policies might limit coverage for mold damage, but extended coverage can offer more comprehensive protection against costly remediation.

Frequently Asked Questions§

Q1: What is normally excluded from standard homeowners’ insurance policies?

• A: Standard policies often exclude incidents like floods, earthquakes, mold damage, and certain types of theft or vandalism. Extended coverage can be acquired to protect against these risks.

Q2: Is extended coverage expensive?

• A: The cost of extended coverage varies based on factors like the type of risk, location, and the value of the property. Typically, the added expense is justified by the specific risks it mitigates.

Q3: How do I know if I need extended coverage?

• A: Assess your property’s unique risks, review your existing insurance policy for exclusions, and consult with an insurance agent to determine if extended coverage is necessary.

Q4: Can extended coverage be added to any type of insurance policy?

• A: Yes, extended coverage can be added to a variety of insurance policies including homeowners, renters, auto, and commercial property insurance, depending on the specific needs.

Q5: Does extended coverage include liability protection?

• A: Extended coverage typically focuses on property damage and not liability. However, some specific policies may include limited liability protection extensions.

Related Terms§

• Exclusion: Specific conditions or circumstances for which the policy does not provide coverage.
• Endorsement: An amendment or addition to an existing insurance policy which changes the terms or scope of the original policy.
• Peril: The cause of a loss, like fire, theft, or flood, which may or may not be covered by insurance.
• Liability Insurance: Coverage that protects against claims alleging that a property owner’s negligence or inappropriate action resulted in bodily injury or property damage to another party.
• Deductible: The amount of money that the insured must pay out-of-pocket before the insurance company pays a claim.

Online Resources§

• Insurance Information Institute (III)
• National Flood Insurance Program (NFIP)
• California Earthquake Authority

References§

• “Homeowners Insurance 101: A Guide to the Must-Have Coverages”. Investopedia. Retrieved from Investopedia Guide
• United States Department of Homeland Security. “National Flood Insurance Program”. Retrieved from FEMA
• “Extended Coverage: What Property Owners Need to Know”. Insurance Information Institute. Retrieved from III

Suggested Books for Further Studies§

1. “Insurance for Dummies” by Jack Hungelmann
2. “Property and Casualty Insurance Concepts Simplified” by Christopher J. Boggs
3. “Homeowner’s Insurance Basics: Everything You Need to Know” by Cynthia Kersey
4. “Personal Insurance: The Foundation of Asset Protection” by Debbie M. Cook
5. “Understanding Property Insurance and Compensation Plans” by William G. Werfelman

Real Estate Basics: Extended Coverage Fundamentals Quiz§