Extensions of coverage broaden the basic contract terms for special circumstances and types of property. These are normally included at no additional cost, and no premium savings result from eliminating them. They sometimes apply on a first-dollar basis, which waives the deductible. In most cases, coverage is limited. Common extensions cover:
- New construction or newly-acquired property, even if the insurer is not informed of them.
- Trees, lawns, plants and shrubs against damage by named perils.
- Valuable papers and records, such as parish registers, pledge reports and similar one-of-a-kind documents, for the cost of reconstructing them if necessary.
- Additional expense above normal operating expenses necessary to continue operations after direct damage to property by an insured peril.
- Property off premises, whether in transit or otherwise away from policyholder's premises.
- Debris removal following a covered property loss.
- Personal effects or property of others while on the policyholder's premises.
- Contingent liability and increased cost of construction resulting from the forced demolition of any undamaged portion of a building following a loss or repair/reconstruction following current building codes and ordinances.
Tip: Ask whether extensions of coverage in your policy are on a first-dollar basis, or whether the standard deductible applies. The answer could affect how much coverage you need.