Insurance for Basement & Contents?

Question

I just found out that our homeowners policy (USAA) does not cover many items in a basement (such as finished walls, furniture, etc.). This in turn doesn't make for a compelling argument to spend $100K to finish the basement, since it apparently can't be covered. Any insurance out there that we could engage for coverage on this? I know insurance companies are in general a very shady industry to begin with, but this just seems ridiculous...even for them.

Answer 1

If i understood you correctly, you want to remodel your basement. Standard Homeowner's policy will not cover you while you do any kind of remodeling or repairs. WHat you need to do is to buy a "Course of Construction" policy during the time you are remodeling.

Answer 2

I have never heard of that on a standard home policy.  All the companies I write for would cover your finished basement and the contents inside of it.

The only time I have ever heard of limited basement coverage is on a flood policy.  This is a separate policy from the homeowners policy & will only cover the house systems (furnace, water heater, etc), a deep freezer & washer & dryer, that is about it.  Also, if the basement is finished, it will only cover untaped, unpainted drywall, nothing else.

If the policy you are speaking about is a homeowners policy, I would suggest you shop around to other companies, right away.

Edit:  Cracks in the foundation (unless you have earthquake for earth movement) are generally excluded unless caused by a fire & seepage is excluded unless you have water backup of sewers & drains (& that has to be through the piping) & sump pump overflow (& you have to have a sump pump for that coverage).  So I guess maybe your agent really doesn't know what they are talking about & so  read your policy - and go find a new agent!!  I'm going on 20 years in the business in 2 states & this is totally a new one on me.  Is there some special endorsement that USAA offers for this?  Seepage is such a common problem that I would really be surprised if this is offered on your policy.  It is not even covered by flood insurance.

Answer 3

Sue is 100% correct on this!  USAA is full of it!