Are you confident you have the right insurance to protect you from life’s little—and big—emergencies? You might be surprised. Take this quiz and find out where you stand.
1. A flash flood swept through my living room, ruining my carpet and damaging an antique wooden trunk filled with family photographs. My homeowners insurance will pay for all the damages.
FICTION: Your homeowners policy does not include flood coverage. In general, only policies issued through the National Flood Insurance Program provide homeowners coverage for damages from flooding. Check with your insurance provider to see how you can get coverage.
2. My eighteen-year-old son wrecked his 1996 Chevrolet Cavalier. Fortunately, his auto liability insurance will pay for his car repairs.
FICTION: Generally, auto liability policies provide coverage only to third-party vehicles—those operated by other drivers—in an accident. Your son would need collision insurance to pay for the damages to his car, which can be added to your auto insurance policy for minimal cost.
3. My 1920s home has old plumbing fixtures that have corroded. My homeowners policy will pay to replace them.
FICTION: Homeowners policies cover most major perils (cause of loss), but don’t include damages that consist of normal wear and tear, deterioration, or mechanical breakdowns of home systems and major appliances. You can purchase a home warranty plan for those types of problems through a number of vendors, such as American Home Shield.
