10 Surprising Homeowners Insurance Exclusions: Damages Home Insurance Won’t Cover
You buy homeowners insurance to protect against unexpected damage. Unfortunately, homeowners insurance doesn’t cover everything.
All homeowners insurance policies have exclusions. A standard homeowners insurance policy, for example, does not include flood insurance. Others may exclude damage from “wind driven rain” and other perils.
Many homeowners are unaware of exclusions until it’s too late. Fortunately, we’re here to help.
Here are the top 10 most common homeowners insurance exclusions, including damages a standard home insurance policy will not cover.
Standard homeowners insurance policies do not cover flood damage.
If you live in a flood zone, then your lender will require you to purchase supplemental flood insurance through the National Flood Insurance Program (NFIP) or other “Write Your Own” policies offered by your insurance company. You pay different rates for flood insurance based on your FEMA flood zone designation.
Even if you live outside of a flood zone, you could experience catastrophic flood damage. A storm could cause sewer systems to back up and damage your property, for example, even if you live far from the water. If you are not in a flood zone, the insurance is usually very inexpensive, but well worth the money. It only takes about 1” of water through your home to cause catastrophic damage.
Consider your location and proximity to water sources to determine if flood insurance is the right choice for you. Unfortunately, a lot of flooding has been taking place in areas that are not designated as a flood zone, leaving most families and businesses without any coverage at all.
Wind Damage in Hurricane-Prone Areas
A standard homeowners insurance policy covers wind damage except if you live in a hurricane-prone area.
If you live in an area with a high risk of hurricanes, for example, then you generally need to buy extra wind insurance. Many homeowners living in the southeastern United States or along the Atlantic or Gulf Coasts need to buy separate wind insurance. This insurance is usually offered by a “State Pool” of carriers and governed by the area of the wind zone. The closer you are to the coast line, the more the insurance will cost.
Some homeowners insurance policies do include windstorm damage, but insurers charge higher deductibles. Instead of charging your ordinary deductible of $1,000 to $2,500, for example, insurers may charge a deductible of 1% to 5% of your home’s value. This decreases the chances of filing a claim unless there are severe damages.
It is important to make sure that your wind policy covers “wind driven rain” and “additional living expenses”. Without these two endorsements, in the case of a tropical storm or hurricane, you might find yourself without a place to live or coverage for interior damages unless the wind or flying debris makes a hole in your roof or breaks windows.
The Full Cost of High-Value Items, Like Jewelry, Electronics, & Collectibles
Homeowners insurance doesn’t just cover the structure of your home; it also covers all of your possessions inside your home.
However, a standard policy only provides a certain amount of protection per item. You might only receive a maximum of $1,000 of compensation per item, for example.
If a fire destroys your home and your $10,000 engagement ring, then you may only receive $1,000 in compensation from your insurer.
If you have high-value items that need protection, then consider adding an endorsement to your policy. You pay a few extra dollars per month to fully protect high-value items.
Many homeowners assume their homeowners insurance policy covers earthquake damage, but it doesn’t.
In fact, a standard homeowners insurance policy excludes damage related to earth movement, which is why you may not be covered against earthquakes or landslides.
Fortunately, you can buy supplemental earthquake coverage.
Many homeowners who live in earthquake-prone areas purchase supplemental insurance coverage. Residents of California, for example, can buy earthquake insurance through a private insurer or through government programs like the California Earthquake Authority (CEA).
Landslide & Mudflow Damages
Homeowners insurance policies typically exclude damage caused by movement of the earth, which is why they exclude earthquake damage and damage related to landslides and mudflows.
Landslides and mudflows frequently can occur after rainstorms – especially in dry areas that rarely get rain. Although they can occur after earthquakes, that’s not always the case.
If your house is damaged or destroyed by a landslide, then your homeowners insurance may not cover you. Fortunately, you could purchase supplemental coverage through a private insurer or the California Earthquake Authority (CEA) to cover earthquake, landslide, and mudflow damage.
Maintenance, Wear and Tear, and Related Damages
As a homeowner, you have an obligation to maintain your home. Maintenance is an expected part of home ownership.
Home insurance isn’t designed to cover expected damages or costs; instead, it’s designed to cover unexpected damages and costs.
Home insurance won’t cover the cost of fixing a rotten fence board, for example, but it will cover any damage to your fence caused by a fallen tree after a storm.
If your roof is 20 years old and needs to be replaced, then you need to check the wording in your policy. Insurance companies have started using terminology in their policies that only allow for the actual cash value of the roof if it is over a certain age. This means that you would be paying for your roof, not your insurance company. This will happen due to the depreciated value of your roof and your deductible. Homeowners insurance doesn’t cover maintenance, wear and tear, or related damages.
Damage Caused by Poor Maintenance
A standard homeowners insurance policy doesn’t cover maintenance, nor does it cover damage caused by poor maintenance.
If you failed to check your roof for damage after a hailstorm, for example, and your roof started leaking during a later rainstorm, then you may not be able to make an insurance claim.
As a homeowner, you have an obligation to maintain your home. If you fail to uphold that obligation, then your insurer could deny or reduce your claim. It is a good idea to check your roof after each storm and to check the vents and other intrusions to your roof to make sure that they are properly sealed.
Virtually all homeowners insurance policies exclude pest damage. As a homeowner, you generally need to pay for pest remediation and removal out of pocket and cannot make a claim.
Homeowners insurance excludes pest damage because it’s part of home maintenance. If you adequately maintain your home, then you’re unlikely to experience pest damage. If you ignore a pest problem, it gets worse.
In fact, it’s rare to find any type of pest insurance offered by insurance companies. No major insurer offers pest coverage – although some pest removal companies offer a warranty after they service your property. The insurance company might offer coverage for termites if it is “hidden damage”, but it is best to reach out to a Public Adjuster for a policy interpretation to see if you have this coverage or not.
Many homeowners are surprised to learn their policy does not cover mold damage.
In most situations, homeowners insurance will not cover mold damage – especially if that mold is left undiscovered over a long period of time and has no specific, identifiable cause. Some insurance companies will offer a small amount of mold coverage, but this is never enough to properly remediate the home once mold has been discovered.
Even if there is an identifiable cause – like a pipe that slowly leaked – home insurance may not cover it because it’s a maintenance issue. You have an obligation to maintain your home, and that includes identifying leaks before they cause mold damage.
There is an exception to this rule: if a covered peril (like a storm) causes mold damage, then your policy should cover it. If a severe thunderstorm damages your home and causes water to enter your home, for example, leading to mold damage, then home insurance should cover it.
Damage Caused by Dangerous or Aggressive Dogs
Homeowners insurance includes liability coverage. However, that doesn’t mean it protects all incidents on your property.
Many dog owners are surprised to discover their policy doesn’t cover damage inflicted by specific types of dogs.
In fact, you may be unable to buy homeowners insurance if you have certain aggressive or dangerous breeds of dogs.
Many insurers deny or limit coverage if you have a pit bull, rottweiler, or wolf hybrid dog, for example. However, some insurers take a dog-specific approach, only excluding these damages if the dog has a history of aggression, biting, or dangerous behavior.
If your dog is of a breed known for being “aggressive” or “dangerous”, then you may face a denied claim or other exclusions. Check your policy to avoid surprises.
Final Word on Exclusions Insurance Doesn’t Cover
Roughly two of three homes in the United States are underinsured. They don’t carry adequate insurance coverage or their limits are too low. This can cause multiple problems during a valid claim that can leave you without enough money to cover your loss.
In many cases, your homeowners insurance policy has adequate limits – but it excludes certain damages common to your area.
If you think your claim was wrongfully denied or underpaid, contact ClaimsMate for a claim review from a Public Adjuster.