How to Read (and Understand) an Insurance Policy, Part 2
How to Read (and Understand) an Insurance Policy, Part 2
This is the second of a two-part series on common terms relating to homeowner’s insurance policies. In this section, we look at supplemental policies and two common problems with policies.
Supplemental Policies
Supplemental policies are add-ons to a traditional insurance policy. Compare it with buying a new car and opting to add the cold-weather package. Someone in Florida won’t need a cold-weather package for their new SUV, but for someone living in Colorado, that package is less of a luxury and more of a necessity.
Supplemental policies are similar. If a homeowner lives in an area at a higher risk for flooding or hurricane damage, a supplemental policy is less of a luxury and more of a necessity.
Common types of supplemental insurance include fire, flood, and sewer backup policies. Individuals who have detached structures on their property, such as a shed or detached garage, made a supplemental “other structures” policy.
The Dangers of Underinsuring
Underinsurance happens when a homeowner’s policy covers less than the real or current market value of their property. It can also occur when a homeowner doesn’t have needed supplemental policies, such as protection against hurricane damage.
When they make a claim, their claim may exceed the limit covered by the insurance company. Alternatively, they may find their policy doesn’t cover any of the damage, leaving them to cover the costs out-of-pocket.
Bad Faith Claim
A bad faith claim occurs when a homeowner makes a legitimate claim, and the insurer denies it or otherwise behaves inappropriately. In some situations, a homeowner may be able to claim damages or additional compensation from an insurer engaging in bad faith.
Get Help Navigating Homeowners Insurance in Texas
Determining what qualifies as adequate insurance can be overwhelming. Equally challenging can be making sure an insurer honors its obligations in a policy.
If you have questions about homeowners' insurance in Texas, a skilled Texas property law attorney can help. The attorneys at Manfred Law help Texas property owners claim what’s theirs. Call us at 713-547-5460 or contact us online to schedule your consultation.
