For anyone who suffered serious damage from Superstorm Sandy, the following will sound like the advice to close the barn door after the horse escapes.
However, we are subject to serious storms at any time of year in Maine. So, it makes sense to heed the advice that both consumer groups and state officials gave recently and know what your homeowners’ or renter’s insurance covers before you need to file a claim.
The Consumer Federation of America has a detailed checklist that’s worth every homeowner’s time to review. Once you’ve navigated to the website ( www.consumerfed.org), look under “latest news” for the item titled “Seven Things All Homeowners Should Know About Their Home Insurance Policies.”
Here are a few of the highlights:
• Most insurers do not cover losses from earthquakes, floods or landslides. The website has links to determine if you live in a high-risk area.
• Most policies have two separate deductibles: a flat dollar deductible (usually $500 or $1,000) and a percentage of value deductible, which applies on specific damages, such as windstorms. Since coverage can vary depending on the weather event, you may be stuck with heavier out-of-pocket costs than you expected.
• Watch out for hidden clauses, such as anti-concurrent-causation clauses. If a hurricane causes wind damage and later there’s a storm surge, you may not be covered at all unless you’ve bought flood insurance. Ask your agent if your policy has an ACC clause, and get in writing what happens if two events occur at about the same time.
• “Replacement cost” may not be the true cost of rebuilding. If many homes in an area are damaged, costs may be driven up by high demand. Your replacement cost (less your deductible) might apply in the best of times but not when everyone else is scrambling to make repairs as well.
• When possible, choose “all risks” coverage rather than a policy with “named items”; the former is much more complete. Added coverage for mold damage and replacement of high-value items may also be worthwhile.
• Some policies don’t cover the extra costs of meeting new building code requirements. Such coverage is generally inexpensive and worth having.
An earlier column dealt with filing claims (see BDN, Nov. 5, 2012). People at the Maine Bureau of Insurance can also help. Reach them on the Web at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta, ME 04333.
If you have a business that’s shut down for reasons stated in your policy — such as hail or fire — there’s coverage available for business interruption. There’s usually a waiting period for a payout, which serves as the deductible.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email firstname.lastname@example.org.