Covered or Not: 10 Reasons You May (Or May Not) Need Extra Insurance

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  • Insurance companies make their money insuring things that are unlikely to be damaged or lost in a catastrophic accident. That’s how they stay profitable. In order to do that, they often end up insuring some strange or unusual property and items under general homeowners insurance policies, while requiring riders or custom policies for things most people would automatically assume were covered.

    Here are 10 objects or circumstances you may want to double-check to make sure your customers have just the right coverage.


    5 Items Generally Included in Insurance Coverage


    1. Plants

    At first glance, plants may not seem to have all that much value. After all, you might drop $20 or so at a nursery on some geraniums or daffodils. 

    While it’s true that many plants are inexpensive, others can come with a steep price tag. Take a Japanese Maple for example. Six-foot tall potted trees usually go for $80 to $120, while one with a 2-inch trunk diameter can cost up to $200, says Craig Wallin at Profitable Plants Digest.

    And some of the more rare and exotic plants are worth thousands of dollars. One Gold of Kinabalu orchid, for example, costs a staggering $6,000, adds business writer Louie Andre

    Fortunately for plant enthusiasts, homeowners insurance usually covers damage to landscaping around a home. For high value plants, personal finance writer Sabah Karimi explains that an insurance rider will provide additional coverage for damage stemming from snow and hail.


    2. Bed Bug Damage

    Bed bugs are nasty little insects that can cause unpleasant skin irritations from their bites as well as significant damage to property. “It can cost more than $1,000 to get them exterminated from your domicile,” says personal finance writer Paul Sisolak. “That’s not counting the costs to replace an infested mattress!”

    And bed bugs are more common than you may think. According to the PestWorld team, nearly all (97 percent) pest professionals have been called to jobs involving bed bug infestations within the last year. Because of the financial impact these insects can have, Sisolak says some people choose to add bed bug insurance to their renters or homeowners policy. And for those who are frequent travelers and are afraid of bringing bed bugs home, they can add travel coverage to their rider.


    3. Spoiled Food

    Power outages across the United States vary by state, but on average, customers deal with 1.3 interruptions per year, with the average outage lasting for four hours, according to the U.S. Energy Information Administration

    One of the unfortunate byproducts of power outages, especially the longer ones, is spoiled food. But believe or not, there are insurance policies available that will cover the cost of replacing food that goes bad, says personal finance writer Sabah Karimi. As long as outage and consequent spoilage happened because of something the insured can’t control (like an ice storm or a tree falling on a power line), the insured can be reimbursed for the cost of replacing their spoiled food.

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    4. Body Parts

    You may have heard stories of famous celebrities insuring certain parts of their body in the event of an unfortunate disaster. Model Heidi Klum, for example, insured her legs for $2 million, and The Rolling Stones guitarist Keith Richards insured his hands for $1.6 million, explains business and finance writer Dan Ketchum. And this isn’t something that’s just limited to society’s elite. Anyone can ensure a body part through specialty insurance providers such as Lloyd’s of London. 

    There’s also accidental death and dismemberment insurance (AD&D), which covers a body part if it’s completely lost, writes Julia Kagan, personal finance editor at Investopedia. Although insuring a body part doesn’t come cheap, it’s an option some insurance customers may be interested in. 


    5. Alternative Pets

    Conventional pets like dogs and cats are easy to ensure, and there are many pet health insurance policies available that typically cost between $30 and $50 a month, according to consumer spending resource ValuePenguin. But what about people with pets like chickens, pigs and cows?

    Some private insurance companies offer livestock insurance for these types of farm-appropriate animals as pets in a residential setting, notes Sisolak. Specific coverage relates to loss stemming from accidents, bad weather and crime. And with a growing number of people homesteading — even in larger cities — it is coverage that is becoming increasingly common.


    5 Items That May Require a Rider or Custom Policy


    1.  Large Amounts of Cash

    Before the days of digital banking, mobile payments and cryptocurrency, many people used to stash money around the house. Trent Hamm, author of “The Simple Dollar” even lists great cash stash spots, like a buried jar in the backyard, hidden in a sock at the bottom of a drawer or in a plastic bag in the back of the freezer.

    However, while a standard insurance policy will usually cover a small amount of cash, you’re on your own if it exceeds a couple of hundred dollars, warns financial writer Sam Becker. So people need to use caution if they plan on keeping any more than this around the house.

    Each policy varies, of course, but typically homeowners insurance is very limited when it comes to lost cash and will typically only cover up to $200, says former insurance agent Vicki A. Benge. If you lose more than that due to fire or theft, you’re simply out of luck. 


    2. High Priced Jewelry

    Many people assume that a homeowners policy covers their jewelry, no matter how expensive it is. While it’s true that it will offer some level of protection, it’s insufficient if the homeowner has extremely costly jewelry, including family heirlooms. Most insurance providers lump this under the same category as “precious stones,” meaning it’s only covered to a degree. 

    “Because jewelry is at high risk of being stolen, insurance carriers often limit jewelry coverage to about $1,500,” says personal finance writer, Crissinda Ponder. “You’ll need to purchase a rider, also known as an endorsement, to cover your expensive jewelry, though your items will need to be appraised first.”

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    3. Flooding Damage

    Flooding is a major problem throughout much of the world, and roughly 41 million Americans live in flood zones, according to Yale Environment 360 magazine — more than three times the number FEMA estimates. This makes flooding the most common and widespread natural disaster, notes the National Severe Storms Laboratory.

    And damage from flooding can be quite costly. Environmental writer Christina Nunez reports that flooding does more than $40 billion in damage worldwide each year, with the losses in the U.S. alone reaching $8 billion. 

    Given the frequency and cost of flooding, many people would assume that a standard homeowners policy would cover it. But that’s simply not the case. While homeowners will usually cover minor damage from leaking plumbing or a broken washing machine hose, it won’t cover major damage from flooding.

    As a result, homeowners need to purchase separate flood insurance from FEMA’s National Flood Insurance Program. The maximum amount of coverage for the structure of a home is $250,000 and contents can be insured for up to $100,000.


    4. Certain Electronics

    Many people automatically think that all of their electronics are covered by homeowners or renters insurance. But that’s not always the case. 

    “Electronics — a big category, of course — might not be included in your homeowners insurance policy,” Becker explains. “There are a lot of potential things to throw in this basket, including TVs, video game consoles, computers, tablets, smartphones, etc.” 

    That’s why insurance customers with a large investment in electronics should always pay close attention to their policy to see exactly what is and isn’t covered. If there is any lapse in coverage, they should consider separate phone and electronic device insurance to cover the gaps.

    5. Mold Damage

    Not only is mold potentially dangerous in terms of health, it can also be extremely costly to fix the damage it causes. Home improvement writer Karin Beuerlein says homeowners can expect to pay up to $6,000 for professional mold remediation. It can sometimes cost tens of thousands for a severe problem that involves structural damage. 

    As a result, most home insurance companies either offer no coverage for mold or have very tight limits, writes Doug Whiteman, editor in chief at MoneyWise. Unless the mold was the result of a “covered peril” like a burst water pipe, most homeowners will have to pay for mold remediation and structural repair out of pocket.

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