Know what is covered under your homeowners insurance policy.
Maintenance homeowners insurance most commonly refers to plans available for purchase which would repair or replace major appliances in the event of a breakdown. This term does not refer to the standard homeowners insurance policy required to secure a mortgage. Since your home is one of the biggest investments you are likely to ever make, you should know how routine maintenance and homeowners insurance are related to one another.
Homeowners Insurance
Homeowners insurance is designed to repair or replace the structure of your home as well as the contents therein against losses covered by the policy. Many policies also pay to temporarily relocate a family after a covered loss and cover legal costs for which a family is liable. These policies are not designed to have frequent claims and should be used for large losses such as fires, burglaries and major structural damage.
Insurance Misconceptions
Homeowners insurance is not meant to cover routine maintenance. In fact, "normal wear and tear" is a common exclusion on these policies. Damage occurring from a lack of maintenance, such as an unrepaired leak or uncleaned gutters, may not be covered in the event of a claim.
Warranties Upon Purchase
Some real estate transactions come with certain warranties. For example, if appliances that are sold with the home fail within two years of the purchase, the seller or broker can agree to replace them. These agreements are not standard, nor are they backed by an insurance company.
Home Warranty Contracts
Some companies offer "warranty" service protection. In exchange for a monthly fee, licensed contractors will repair or replace large appliances in the event of product failure. Despite the common term "maintenance homeowners insurance," these agreements are service contracts, not insurance policies. Some insurance companies partner with these service providers as a value-added product for their customers.
Maintenance and the Homeowner
Routine maintenance is ultimately the homeowner's responsibility. Like servicing your automobile, your home will need periodic repairs, improvements and upgrades. Failure to perform this maintenance carries potential insurance consequences, such as raised premiums, canceled contracts or denied claims. Keeping your gutters clean, promptly fixing leaks in the pipes or roof, unclogging stopped drains and replacing faulty electrical outlets are all ways to avoid much larger problems through regular maintenance.
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