Can you own two home owners insurance policies?
Daniel K asked:
I have one Home owners insurance policy. It just barely covers the cost of rebuilding which is close to the mortgage amount, in case of fire etc. Can I get a 2nd Home owners insurance policy to compensate me for my losses outside of the actual building of the house it self?
Tora Portnoff
I have one Home owners insurance policy. It just barely covers the cost of rebuilding which is close to the mortgage amount, in case of fire etc. Can I get a 2nd Home owners insurance policy to compensate me for my losses outside of the actual building of the house it self?
Tora Portnoff
No you can not get another policy…. But you can get smarter and tell your insurance seller to increase the loss amount on the home.. don’t forget to include the contents of the home.
Yes you can or just improve on the policy you already own with your lending institution ( bank mortgage company etc.) you should take out a mortgage Life and Disability Insurance. In case of death or disability the Bank will pay themselves the outstanding amount owed on mortgage. Therefore your spouse or your estate will not be stuck paying off the debt if you die or become disabled and unable to work and make your payments. This can also be bought at a Private Insurance Company, too. Its a good thing to have. If you are young ( under 35) and in good health this ins. is not too expensive. Speak to an insurance broker about your options, you will be very relieved.
Your policy should compensate you for your losses, but no more. This is the basic principle of all insurance policies.
I’m a little confused when you say you want to be compensated for your losses outside of the actual building of the house itself. Your policy should include coverage for rebuilding, as well as for replacing your personal possessions, landscaping, clearing away debris, and additional living expenses while your home is being repaired. Go over this carefully with your agent to make sure you have the proper coverage. If your company can’t cover it properly, consider changing companies. If your agent can’t answer your questions, consider changing agents.
On the other hand, you can not get a second homeowners policy that covers the same losses, in the hope of collecting twice. I’m not sure if this is what you are suggesting or not. If it is, be aware that submitting the same claim to two different companies is insurance fraud.
Yes, you can own two policies. No, you won’t get paid twice.
The two policies would “share” the loss – in effect, you can’t get more than the most generous policy would pay. So it’s kind of pointless.
You’re much better off endorsing your current policy, and making sure the limits are up to date.
And, btw, the most ANY policy will pay, on the building, is the cost to rebuild. So if you have a $100,000 house and you insure it for $1,000,000, and it burns to the ground, the insurance company will pay the cost to rebuild that old house. Not the new and improved with 1,000 extra square foot house.
Homeowners policies DO include losses outside the building. But whatever it is you have in mind, you have to discuss it with your agent, to be sure its covered under your policy.
Owning two identical insurance policies and collecting on both of them is illegal. HOWEVER, you can read the current contract of your insurance policy (I know, it is absolutely impossible to read b/c it is confusing, but still…) and try to see whether your personal property (i.e. items INSIDE the house are covered) Also, your homeowners insurance should have a set amount of coverage to cover your expenses in case you need to rent a place while your home is being fixed if it was affected by a “covered peril.” You should also have a coverage where your insurance company idemnify (cover) you in the event that you committed a tort (civil wrong) and are being sued (if it was intentional tort, you will not be covered). If you are having difficulties reading your policy, go to your insurance agent and ask him all these questions. Make sure you are covered and HAVE him/her show you in the policy where it discusses that specific coverage. If the insurance agent tells you one thing and then you are not covered in the event something goes wrong, you may have a claim (law suit) against the insurance company (if that insurance representative was insur. company’s AGENT) or against that representative himself (if he was your broker).
Additionally, you can also look into UMBRELLA coverage. Umbrella insurance coverage is available to individuals who want protection BEYOND what they already have. It is usually not as expensive since you are paying for the coverage in the event that your primary insurance policy doesn’t cover your loss completely (i.e., you have a $300,000 homeowners policy, then umbrella insurance will cover if there is damage above $300,000 to the specified amount). It is also a good idea to have such policy if you earn a lot of money b/c then if you are sued for something, you will not be PERSONALLY responsible for the damages.
Remember though that the first place to start at is reading your policy, then if your property is underinsured, update your policy limits. You may want to ask for additional excluded peril coverage (i.e., flood, hurricane, natural fires, earthquakes, mudslides, etc. are NOT covered under the standard h/o insurance). If you go with the umbrella coverage, make sure it covers YOU, and not the property b/c if your property is worth $x amount, neither umbrella nor your h/o insurance will pay you more…
I hope this helps =)