Water damage

Do you think insurance pays if your home gets flooded?A lot of times it doesn’t.

Do you think if you buy national flood insurance (NFIP) that now your water damage is covered? It still may not be.

Did you know you can buy an endorsement that will cover some of the water damage not covered by your main policy or your NFIP policy? You can, but it still doesn’t cover all water damage.

If you live in an area with high risk of water getting into your home, there is a very high chance you are underinsured. There is no perfect insurance for water risk. However, you can be less underinsured if you buy additional coverages to protect you.

Personal floater

Wait, didn’t we just cover water damage? No, a “floater” has nothing to do with floating in the water in your home. It’s another way insurers describe a flood without calling it a flood!

A floater is a policy to cover your possessions that aren’t covered by your basic home insurance policy. Got that? No? It’s because insurance isn’t good at plain English.

Floaters cover things that are too valuable to be in your contents policy and require special documentation. Think of artwork, jewelry, collectibles, etc.

If you bought something rare or expensive, you might want to ask if it needs to go on a floater policy, so your valuables are covered if damaged or stolen.

Personal contents

Let’s keep this simple. Personal contents are your stuff. Pretty much everything that didn’t come with the house is contents.

Most insurance defaults your contents coverage to a percentage of your home replacement value, often 50%.

This is enough for most people, but if you think you need more than 50% (maybe you have some very expensive furniture or clothes?), you should tell your agent.

Umbrella coverage

Did you win the lottery? Inherit a lot of money? If you have over $1 million in assets, you probably need an umbrella policy to protect you from personal liability.

What does an umbrella policy do? In short, an umbrella gives you extra liability coverage beyond what is in your auto and home policy.

For example, if you ran a red light and caused an accident that seriously injured the other driver, you might be sued for more than the liability provided in your home and auto coverages. This is where an umbrella policy would protect your wealth.