Unexpected Homeowners Insurance Exclusions to Watch For

First-time buyers (or all buyers, quite honestly) don't read their insurance policies. They are lengthy documents full of legalese. There are a lot of exclusions in all insurance policies, and it would be good for first-time buyers to at least understand some of the basic exclusions and limitations in their policies. For instance, while there would typically be some coverage for jewelry, the coverage would have sub-limits. For many families, something like an engagement ring would most likely exceed the sub-limit for jewelry.

In order to get proper coverage for the ring or other similar items, buyers would need to add a specific rider to the policy. Another common limitation has to do with the age of the roof. Often, the policy terms cover the roof on a replacement cost basis for the first 10-15 years but then switch to actual cash value (which reduces coverage for depreciation) to manage the coverage cost.

First-time buyers should also take the time to understand the deductibles they are responsible for. While it may not be reasonable to expect all insurance buyers to read their complete policy, they should at the very least read through and understand the DEC (short for declarations) page, which provides a summary of their coverage selections, limits, deductibles and associated premium.