People who live in New York City have a number of particular factors to consider when buying homeowners insurance. Besides the usual damages potentially caused by weather, you can experience water damage from flooding resulting from a hidden leak, fire or smoke damage from a neighboring apartment or house disaster, or problems because of asbestos or mold in your apartment building. One question that you need to consider specifically is: does homeowners insurance cover mold? We look at what homeowners insurance covers in 2020 and why you need it along with an innovation in the industry here.
What Does Homeowners Insurance in New York City Cover in 2020?
Dwelling coverage is what most people think of first when they consider homeowners insurance. This category covers damage that pertains to your home or apartment’s structure. Such coverage safeguards your residence from damage to your home and anything that is attached to it like a chimney or garage. It is important when you are looking at this dwelling coverage category to not select the current market value or purchase price of your home. What you need is the policy to provide for reconstruction costs, the price to rebuild your domicile to its pre-damaged condition.
Personal Property and loss of use deal with the disaster damages to your things and lifestyle. The personal property category will cover your possessions outside and inside of your dwelling. A burst pipe ruining your couch would be covered by this. Meanwhile loss of use would reimburse you for expenses if your dwelling became uninhabitable from covered damage. This would include costs for a place to live temporarily and daily costs of living like laundry and food.
There is also “another structures” category in your policy. Your dwelling might have a shed, fence, or driveway. If a covered danger damages these structures, your homeowners insurance policy should pay to help fix them.
A last category that homeowners insurance policies will cover is liability and medical protection. If someone becomes injured while on your property (or a person covered by your policy damages another person’s property) the insurance company will cover this. Similarly if someone has medical costs from an accident on your property, the medical protection part of the policy pays for their treatment expenses.
Do Standard Home Insurance Policies Cover Mold and Water Damage?
The general coverage is helpful, but people should be aware of its limitations. It might not address the specifics of water and mold or fire damage to New York City houses and apartment buildings. Neighboring leaks or fires can create damage, and older buildings may contain asbestos or lead.
Mold is an especially important consideration as it can be hard to detect. It is also a highly costly problem to treat as the root cause can be hard to determine. The majority of insurance firms will not insure against mold in a standard policy. What you can do is to add an endorsement for limited microbes or fungi coverage to your homeowners policy.
A limited fungi or microbes endorsement will give you more coverage, but it is still limited. The average mold endorsement provides as much as $2,500 in financial coverage. Up to this amount, it would protect you against the expense of taking out the fungi and tearing out to replace the impacted sections of your home. It would also help to defray the costs of checking the air quality once the mold has been removed. If you have to stay somewhere else while your house is treated, it helps with these expenses as well.
It is important to know that this coverage only applies if the fungus or mold has come from a peril that is covered in your policy. These so-called covered perils can be different based on the policy. With an all perils policy, you are covered for everything that is not directly excluded in your policy.
If you have a named peril policy instead, you will only receive coverage for conditions that the policy documents specifically state. The majority of homeowners insurance policies will insure your dwelling structure as open peril while your belongings are handled under a named peril basis.
Another thing that you should be careful about is the exception for coverage that comes from your mold happening due to continuous or constant water leakage. If your house or apartment has suffered from a leaking sink over months or years leading to mold forming, your policy will not cover you. Water damage and mold that resulted in your drywall from a burst pipe would be covered by this endorsement for mold.
When Might Mold Coverage Be Excluded from Your Homeowners Insurance?
There are three cases specifically where mold removal might not be covered by your homeowners insurance. Your policy could directly exclude this coverage while you do not elect to get an endorsement. If the mold resulted from a flood, it will not be covered either. Maintenance issues that create mold are a third excluded case.
What can you do about these exclusions? You should seriously contemplate buying extra coverage for such catastrophes as floods (as well as hail and earthquakes). These are not covered by standard policies. Adding an endorsement for mold and fungus in New York City residences is also a good idea. Also consider that if you opt for a higher deductible for your coverage, this will likely reduce your annual premium. The tradeoff is that you will have to come up with more out of pocket money should you have to file New York insurance claims.
A New Innovation in Homeowners Insurance
One new innovation in homeowners insurance in New York City is the rise of a new concept called Lemonade Insurance Company. In only a few years, this company based in New York has upended traditional insurance company policies and procedures. They enjoy an A-Exception from Financial Stability Ratings provided by financial analysis company Demotech, Inc.
What Lemonade is doing is employing artificial intelligence to match homeowners with the proper policy for a lower price. You are able to receive quotes and apply for coverage on their Lemonade app or website. Lemonade will use your location, age of the house or apartment building, distance to emergency services, and similar factors to provide you with the quote. You are able to add additional coverage such as mold and asbestos endorsements afterward. They provide quotes as quickly as 90 seconds.
The claims process is where they have really impacted the homeowners insurance industry in New York City. Their payment policy does not involve taking money out of their profits to pay claims (as with traditional insurance companies). Instead, they only assess a flat rate fee and then the remainder of the premium goes to claim payouts. Money that remains after claims are paid they put to charities of the policy holder’s choice.
This makes their claims procedure much easier as they are not trying to find a way to deny your claim or reduce the payout. All that a policyholder has to do to file a claim is utilize their app claims sections to inform Lemonade of what happened. This involves recording a video that describes the incident and providing an electronic signature. They pay out many of their claims in only three minutes, while others might need a longer review period.
Homeowners insurance is about more than just being certain that you have the appropriate type and level of coverage that you need. When you do have a claim, it is important to bring in a professional who can help with your claim so that the traditional insurance companies will not pay out only a basic minimum. Damages from mold, fire, and asbestos can all be complex and hidden. You should bring in a professional insurance restoration contractor. They will help you to properly fill in the insurance restoration forms to ensure that your claim has the greatest chance of being fully approved and paid.
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