When you purchase an insurance policy for your home, you do so with the intent of protecting what is most likely your most valuable asset. However, many people assume that the policy covers everything that could possibly happen to a home without ever reading the terms of the policy.

Avoid these three common mistakes associated with home owners’ policies.

Replacement vs. Repair

As a home owner, you must verify that your insurance policy guarantees complete replacement of your home should an event occur that destroys the property. Some policies will only repair the damage, while others will only replace the home to a certain amount, even if this amount is not enough to rebuild the home. Verify that your home will be replaced at current value and not just a specified amount.

Flooding

Flood damage is never covered by a home insurance policy. Home owners that believe that they are at risk for flooding in their home will be required to purchase a separate flood policy for their property. The government has a flood insurance program available for people in areas that are subject to continual flooding.
Mold Repairs. If you are prone to flooding in your area, you will need to be aware of black mold damage. Mold can enter your home at any time there has been flood water present. Flood insurance will not cover mold damage under most circumstances; you will have to refer back to your original insurance policy. However, you will need to make sure that this type of repair service is covered under your policy.

Storm or Act of God

Some home owners policies will not cover Acts of God in areas that are prone to these events. Hurricanes, tornado, earthquake and electrical storm damage may not be included with your policy unless you purchase an additional rider to cover these events. Always review this part of your policy to make sure that you are covered for any unexpected natural occurance.