White Coat Investor Podcast

WCI #231: How Much Homeowners Insurance Do I Need?

Oct 7, 2021
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ADVICE

Check For Major Exclusions

  • Check your homeowners policy for major exclusions like flood and earthquake since they are usually not included.
  • Buy separate flood or earthquake coverage when your local risk or mortgage requirements make it sensible.
ANECDOTE

Flood Insurance Paid After Nearby Backup

  • Dr. Jim Dahle bought flood insurance in Virginia because his house was only 12 feet above sea level and flood waters nearly reached the porch during a hurricane.
  • Flood insurance later paid to repair first-floor damage after a storm-drain backup in his neighborhood.
INSIGHT

Expect Many Maintenance Exclusions

  • Homeowners policies exclude many gradual, maintenance-related, and vacancy-related losses that people assume are covered.
  • Expect exclusions for freezing if heat was shut off, foundation settling, pests, and long-term seepage or vacancy vandalism.
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