Should I get broad form or comprehensive home insurance coverage?
If insurance definitions make you a little nervous, learning the basics is a must. Let’s start with two home insurance terms that can have the biggest impact on the type of coverage your homeowner’s policy provides: broad form and comprehensive.
One regular pepperoni pizza, please!
Broad form home insurance is like ordering a regular pepperoni pizza — you know exactly what you’re paying for. Broad form coverage is a good, basic policy that covers loss or damage due to a set list of causes (also known as perils).
But if you’re concerned that the list is missing items you want, you can add more at an extra cost, just like with pizza toppings. In insurance, these added toppings can have a bunch of different names — endorsements, floaters, and riders. Whatever they’re called, they all mean the same thing: you’re asking the insurance company to add specific coverage to your home insurance policy. Much like when you’re ordering a pizza, the onus is on you, the policyholder (or pizza eater), to make this request.
The list of perils covered under a broad form policy is pretty standard across the industry, but be sure to review your own policy to find out which specific coverages it includes. With broad form coverage, if damage to your home is caused by a peril that’s not listed in your policy, the damage may not be covered. You’ll also need to check your policy for the definition of each peril that’s covered, because the insurance company can limit how coverage applies. A standard list of perils covered by a broad form policy might include:
- Fire or lightning
- Falling objects
- Impact by aircraft, spacecraft, or land vehicle
- Vandalism or malicious acts
- Sudden and accidental water escape or rupture
- Windstorm or hail
- Theft including damage caused by attempted theft
But I wanted “the works”!
By contrast, comprehensive form home insurance (sometimes called “all risk” insurance) is more like ordering a pizza with every single topping the pizzeria has to offer. But one difference worth noting is that if your insurance company chooses to exclude something from your coverage, the exclusion has to be specifically outlined in your policy. There are a lot of common exclusions — and some that may come as a surprise — so pay attention to what your insurance company and your specific policy have flagged. Some examples of common exclusions might include:
- Running a business on your property
- Damage caused to sporting equipment as a result of use
- Damage caused by wear and tear, deterioration, mechanical breakdown or defect, rust or corrosion, extreme temperatures, rotting, or fungus
- Damage when your property has been vacant for a set period of time
- Damage caused by birds, rodents, insects, and other pests
- Damage caused by your own pet
Get the most bang for your pizza bucks
At the end of the day, home insurance policies — like pizza toppings — are all about personal preference and availability. You’ll need to decide what coverage matters most to you and weigh the benefits of that coverage with the costs. Comprehensive form insurance might cost a bit more than broad form, but in the event of a loss, you might be happy you paid for the extra coverage.
If you’re still having trouble deciding on your coverage, contact your insurance broker to get all the information you need to make a sound decision — at no cost to you.