7 Perks Hiding in Your Insurance Policy

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Surprising Things Covered by Insurance

By Geoff Williams

The next time something really bad happens to you, check the terms of your insurance policies. There's a chance you may be covered.

By bad, we mean something expensive, of course. If something expensive happens to you, consult your insurance policy or contact your agent. While you're probably just as likely to learn that you aren't covered for whatever calamity has befallen you, many insurance policies -- homeowners in particular, but also auto and life -- occasionally offer compensation for unusual but somewhat common problems.

As a general rule of thumb, the higher your premiums, the likelier you are to find coverage for more obscure problems, says Brett Woodward, a senior vice president at NFP, which specializes in offering life insurance for high-net-worth individuals. Still, even if you have a bare-bones policy, it can't hurt to give it a once-over. Maybe you are covered, or after reading this, you may want to adjust your policy so you have safeguards against these and other events. Here are some surprising protections you might find:

1. Your College Kid's Belongings

Some insurance policies will cover your child's belongings -- if he lives in a dorm, which is apparently considered less risky by the insurance industry than an off-campus apartment. (Good luck finding coverage for that on your policy, although your child can, however, get renters insurance.)

"The average college student will bring between $5,000 and $10,000 worth of personal property to college, ranging from technology, electronics and textbooks to clothing, furniture and bicycles," says Dick Lavey, chief marketing officer at the Hanover Insurance Group, in Worcester, Massachusetts. "Most students will suffer a loss at least once, with the most common cause being theft and the most severe being fire and weather events."

2. Yard Damage

You know that if a tree falls on your house, your homeowners insurance typically covers that. But if a tree falls onto your fence or guest cottage, there's a chance you're covered for that, too. Scour your policy for the term "other structures." If you find it, you've probably struck gold.

"Other structures coverage is a component of your homeowners insurance that pays for damages to other structures on your property, such as detached garages, sheds, fences and cottages," says Elaine Montgomery-Baisden, vice president of personal insurance at Travelers. A standard home policy will typically provide 10 percent of your total dwelling coverage, so if your home is insured for $200,000, you'd receive up to an additional $20,000 for those extras around your house.

3. Car Seats

If you were unlucky enough to be in a car wreck, but lucky enough to emerge unscathed, you might want to replace your young child's car seat -- even if doesn't appear to have been damaged. In fact, just about every safety expert out there will tell you to replace it to be on the safe side.

Many auto insurance policies will pay for the replacement -- a good thing considering how costly car seats can be. According to the parenting website WhatToExpect.com, you'll likely pay $90 to $350 for a good car seat (or far more, if you choose). Hanover Insurance, for example, pays $300 to replace a car seat, Lavey says. It probably goes without saying that in most and probably all cases, the car seat needs to be in your car at the time of the accident.

4. Spoiled Food

Say you bought a lot of steaks for a party, and your power went out the night before, so everything in the refrigerator spoiled. Many homeowners insurance policies cover that. Granted, you aren't likely to try to collect for the lost food in your refrigerator. You'd have to pay your deductible first, and chances are, it's higher than whatever is in the fridge. But this tidbit is worth remembering, just in case your power not only goes out during a storm, but a tree also collapses into your living room –- and on your shed (remember those other structures). In that case, especially if your refrigerator is well-stocked, you'll want to include spoiled food in your claim.

5. Chronic Illness

Some life insurance policies offer a chronic illness benefit. Odds are, you're well aware of whether your policy has it or not since you have to pay extra for this. But if you have an elderly parent who is chronically ill and needs significant care, assuming you're the executor of his or her estate, you may want to check and see if there's a life insurance policy lying around, and one with a chronic illness benefit.

"Some people who are concerned about outliving their money have these. It isn't meant to be a substitute for long-term care insurance, but it complements it," says Ray Caucci, senior vice president of product management, underwriting and advanced sales at Penn Mutual.

The downside, of course, is that the money spent on your loved one's care means less money will go to beneficiaries on the policy. That said, it may not be the first place you turn to, but if money is getting scarce, and a rider that pays for care when you're gravely ill is on the policy, you may want to utilize it.

6. Mice in your car

Say a family of mice now resides in your car, thanks to your stash of fast-food bags and crumbs on the floor. Or maybe a squirrel got into the engine and snacked on your wiring. It happens occasionally, and many car insurance policies will cover you for the damage -- as long as you have comprehensive coverage. Interestingly, if the same mouse and squirrel were to get inside your home and chew the wiring in the walls or do some other damage, most homeowners insurance policies won't cover that.

7. Gravestones

If a spouse or another family member has passed on, many homeowners insurance policies consider a gravestone an extension of your belongings and will often reimburse you for $1,000 to $5,000 if something should happen to it. After all, teenagers have been known to occasionally vandalize gravestones.

The moral of the story? If something expensive happens to you, by all means, check your insurance policy -- just don't get your hopes up.
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