Most homeowners purchase home insurance with the hope that they won’t even have to use it. Unfortunately, home insurance claims do happen and it’s important to know what to expect when they do. While at first glance it may seem like your home insurance policy covers everything, there could be exclusions and limitations that you don’t know about.
What Does Your Policy Cover? 
First, you will only receive compensation for a home insurance claim if the claim is covered by your policy. A typical home insurance policy may include coverage for damages caused by:
- Fire
- Wind
- Hail
- Lightning
- Smoke
- Theft
- Vandalism
Home insurance policies generally do not include earthquake damage, flood damage or normal wear and tear. Be sure to check your home insurance policy to ensure that everything you need covered is covered.
How Much Does It Cost to Replace?
Second, the insurer will consider the damages to your home or belongings and how much it will cost to repair or replace them. Before filing a home insurance claim, it is always recommended that you have your home’s damages evaluated by a professional after an accident. This can help you get a good understanding of whether or not your damages will be covered under home insurance.
You will only be able to receive compensation if you reach your deductible. For example, say a storm causes $4,000 in damage to your home and your home insurance deductible is $1,000. Since the damage exceed the deductible, it may be best to file a claim. However, say the storm only does $400 in damage and your deductible is $1,000. Since you cannot meet your deductible, you may not receive compensation for a claim.
Are You Carrying Enough Insurance?
Say that you have the right kind of coverage and your deductible isn’t a worry due to substantial damages to your home. The next concern is whether or not you have enough home insurance coverage. Not all home insurance policies are created equal. Instead, your home insurance limits should be based on your home’s total replacement cost value. The replacement cost value of your home is how much it would cost to rebuild the home after a disaster. In general, you should have at least 80% of your home’s total replacement cost value in home insurance, although 100% is recommended. Carrying less than 80% can leave gaps in your home insurance coverage.