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When you first took out a mortgage, your mortgage lender most likely required from you to a New Jersey homeowners insurance policy for the length of your loan. This means that as long as you remain a borrower, you need this type of insurance. However, this doesn’t necessarily mean you spend money on something you won’t have any use for.

As the New Jersey Department of Banking and Insurance (DOBI) stated, all of the state’s residents who own homes should have coverage for it. The same goes true for renters who wish to protect their personal belongings. For everyone, having this policy gives them coverage for certain potential liabilities.

Looking at the insurance policy’s inclusions

It’s important you compare these numbers with what you’re paying, since there is a possibility of you having insufficient coverage, or too much at that. This way, you can make the proper changes to your policy to make certain you remain as properly protected as possible. A great place to start when reviewing your insurance is its “Inclusions” page. This term pertains to what your policy covers and the perils you get protection for.

 

Exclusions: What it means and why you should be aware of them

In the world of insurance, you’ll often hear the term “covered,” which refers to anything that a policy provides coverage for. However, just as common is the word “exclusion,” which the DOBI defines as any specified cause or condition that a policy doesn’t cover. It’s very important you take a close look at this part of your insurance, since you want to make sure everything you want to protect is covered.

Fortunately, the New Jersey legislation (A3642/S2502) makes it easier for all homeowners in the state to understand what their insurance policy doesn’t cover. This law requires admitted companies to provide their customers with a one-page summary explaining the most important coverages and exclusions in a clear, concise, and simple manner.

What insurers most often exclude from their services

Reviewing your insurance “Inclusions” page is important (to know what your policy covers and the perils you get protection for).

There are many things, events, and conditions that even just the most basic of all insurance forms provide coverage for. This is all the more reason for you to review your policy thoroughly, as you want to determine what exactly it excludes. In the State of New Jersey, the most common exclusions include the following:

  • Flood Damage – Damages and losses caused by flooding is one of the most common exclusions not just in New Jersey homeowners insurance policies, but in most of the other states in the country, too. Although some insurers may offer their own written flood coverage, in most cases, the organization you should inquire about this from is the National Flood Insurance Program (NFIP).
  • Sewer Backup/Sum Pump Overflow – In many cases, these unfortunate incidents arise due to user neglect and/or normal wear and tear, but they may also occur as a result of accidents. Whichever the reason is, most insurers don’t provide coverage for the damages or losses they bring about.
  • Other Perils Not Covered – There are also certain types of natural phenomena that most insurance policies don’t provide coverage for, such as earthquake. Other types of exclusions are damage/losses caused by wars, neglect, downed power lines, and nuclear hazards.

You have worked so hard for your home and your valuables, and it makes complete sense you want and need to protect all of them. And while the decision to stick to the most basic New Jersey homeowners insurance policy still depends on you, you shouldn’t disregard the benefits that optional and additional coverages can bring you. Read the article, Homeowners Insurance Essentials, for more details.

References:

http://www.state.nj.us/dobi/ins_ombudsman/om_hofaq.htm#1

http://www.state.nj.us/dobi/ins_ombudsman/om_gloss.htm

http://www.njleg.state.nj.us/2012/Bills/A4000/3642_R1.HTM

https://www.floodsmart.gov/floodsmart/