Common Insurance Coverage Gaps

Here’s a list of common insurance coverage gaps you might not be aware of, take heed:

NO FLOOD INSURANCE. Only 12 percent of homeowners nationwide carry flood coverage (per the Insurance Information Institute). Homeowners insurance doesn’t typically cover flooding; you’ll need a separate policy. Note that there is usually a waiting period for this kind of insurance, so do look into it well before the onset of particularly inclement weather!

SEWAGE BACKUPS. Did you know that you’re responsible for the sewer line that runs from the main pipeline in the street to your house? Regular home insurance typically doesn’t cover backups in this part of the sewer line. Sewer backup coverage pays for spewed sewage in your house, and is usually less than $50 a year, (per the Insurance Information Institute).

PAYING FOR A STOLEN OR WRECKED CAR. Gap insurance makes up the difference between what your car is worth when it’s taken or destroyed, and how much you still owe on its loan or lease. But beware, it often comes at a cost that might not be worth it.

POST-DISABILITY INCOME.  If you can’t work because of an illness or accident, you need income. Problem is that Social Security disability insurance is available only to people with long-term disabilities lasting at least one year. Only 38 percent of workers have access to short-term disability insurance through their employers (Bureau of Labor Statistics).

EARTHQUAKE INSURANCE. Most homeowners (even in high-risk areas) go without earthquake insurance. Only 10 percent of California residents have earthquake insurance! Standard homeowners insurance won’t pay to fix damage caused by earthquakes. In California insurers are required to provide an add-on option to you to buy it, or you can research separate earthquake insurance. But it won’t be cheap, unfortunately. It can be just as expensive as your regular homeowner’s insurance, and usually has very high deductibles.