Can you own two home owners insurance policies?
I have one Home owners insurance policy. It just barely covers the cost of rebuilding which is close to the mortgage amount, in case of fire etc. Can I get a 2nd Home owners insurance policy to compensate me for my losses outside of the actual building of the house it self?
Owning two identical insurance policies and collecting on both of them is illegal. HOWEVER, you can read the current contract of your insurance policy (I know, it is absolutely impossible to read b/c it is confusing, but still…) and try to see whether your personal property (i.e. items INSIDE the house are covered) Also, your homeowners insurance should have a set amount of coverage to cover your expenses in case you need to rent a place while your home is being fixed if it was affected by a “covered peril.” You should also have a coverage where your insurance company idemnify (cover) you in the event that you committed a tort (civil wrong) and are being sued (if it was intentional tort, you will not be covered). If you are having difficulties reading your policy, go to your insurance agent and ask him all these questions. Make sure you are covered and HAVE him/her show you in the policy where it discusses that specific coverage. If the insurance agent tells you one thing and then you are not covered in the event something goes wrong, you may have a claim (law suit) against the insurance company (if that insurance representative was insur. company’s AGENT) or against that representative himself (if he was your broker).
Additionally, you can also look into UMBRELLA coverage. Umbrella insurance coverage is available to individuals who want protection BEYOND what they already have. It is usually not as expensive since you are paying for the coverage in the event that your primary insurance policy doesn’t cover your loss completely (i.e., you have a $300,000 homeowners policy, then umbrella insurance will cover if there is damage above $300,000 to the specified amount). It is also a good idea to have such policy if you earn a lot of money b/c then if you are sued for something, you will not be PERSONALLY responsible for the damages.
Remember though that the first place to start at is reading your policy, then if your property is underinsured, update your policy limits. You may want to ask for additional excluded peril coverage (i.e., flood, hurricane, natural fires, earthquakes, mudslides, etc. are NOT covered under the standard h/o insurance). If you go with the umbrella coverage, make sure it covers YOU, and not the property b/c if your property is worth $x amount, neither umbrella nor your h/o insurance will pay you more…
Yes, you can own two policies. No, you won’t get paid twice.
The two policies would “share” the loss – in effect, you can’t get more than the most generous policy would pay. So it’s kind of pointless.
You’re much better off endorsing your current policy, and making sure the limits are up to date.
And, btw, the most ANY policy will pay, on the building, is the cost to rebuild. So if you have a $100,000 house and you insure it for $1,000,000, and it burns to the ground, the insurance company will pay the cost to rebuild that old house. Not the new and improved with 1,000 extra square foot house.
Homeowners policies DO include losses outside the building. But whatever it is you have in mind, you have to discuss it with your agent, to be sure its covered under your policy.