7 Things Homeowners Insurance May Not Cover

There are some things homeowners insurance does not cover.

Many homeowners are surprised flood damage isn’t covered by a standard home insurance policy, for example. Others are surprised to see insurers deny a claim because of an “Act of God.”

By educating yourself on what homeowners insurance covers and does not cover upfront, you can maximize the value of your home insurance policy.

Here are 7 things homeowners insurance does not typically cover.

Bugs, Pests, and Rodents

Bugs, pests, and rodents can cause thousands of dollars of damage to your home. Unfortunately, your insurer may not cover this damage.

Home insurance companies treat pest infestations as a home maintenance issue.

If you have a pest infestation that has caused significant damage to your home, then the insurer considers it your fault: you should have maintained your home and prevented the pests from spreading.
That could mean missing out in significant compensation for damage caused by:

• Wasps
• Rats and mice
• Termites
• Squirrels
• Birds
• Other pests, bugs, and rodents

You can avoid significant pest-related damages with good home maintenance and regular home checkups. However, if you leave your house empty for long stretches, then pests could easily cause significant damage – and your insurer won’t cover it.

How to Get Covered: Maintain your home and check for pest damage regularly. If away from your home for a long period, have a professional check your home regularly for pest-related damage.

Acts of God

A standard home insurance policy will not cover floods, earthquakes, and other significant natural disasters.

If a flood destroys your home, then you may be forced to pay to repair damage (or rebuild your home) out of pocket – assuming you didn’t buy secondary flood insurance from FEMA.
Standard home insurance policies have exceptions for “Acts of God.” It’s a catch-all phrase that includes:

• Earthquakes
• Floods
• Tornadoes and hurricanes (may be excluded if you live in a region where tornadoes and hurricanes are common)
• Other natural disasters that cause damage

You can get coverage for these issues, but you need to pay extra.

Homeowners living in a flood-prone region, for example, can buy flood insurance through FEMA. Or, your insurer may offer additional tornado and hurricane coverage if you live in the southeastern United States.

Even if your policy does cover these items, you may have a high deductible. Some insurers now charge $5,000 or $10,000 deductibles, for example, for wind and storm damage. That means it may not be worth it to make a claim for most minor storm damage. Read your policy carefully to ensure your home insurance policy matches your needs.

How to Get Covered: Check your insurance policy to verify coverage or lack of coverage. Buy flood insurance through FEMA. Buy earthquake, tornado, hurricane, and other natural disaster insurance through your insurer (it’s typically available as an add-on in disaster-prone regions). Check your policy’s deductibles to ensure it’s within the range you expect.

The Full Cost of Replacing your Roof

It costs anywhere from $5,000 to $50,000 to replace a roof, depending on the size of your home and the material used.

Unfortunately, insurance may not cover the full cost of repairing your roof in all situations.

Most home insurance companies now depreciate roofs. That means your insurance company pays you less money based on the age of your roof.

If a windstorm destroys your 15-year old roof, your insurance may only pay you $500 for the roof, and you now need to spend $10,000 on a new roof.

Check your policy carefully to ensure you have the roof coverage you need.

How to Get Covered: Maintain your roof regularly. Check your policy to make sure you understand your roof coverage. Check your roof for damage after hailstorms and windstorms. Or, have professionals check for damages.

The Cost of Rebuilding your Home

If your house is underinsured, then your insurer will not cover the full cost of rebuilding your home.

According to a recent industry survey, nearly 60% of homes in the United States are under-insured by at least 18%.

If a fire destroys your home, for example, then you might receive only a fraction of the compensation you need to rebuild your home.

Your insurer only needs to compensate you up to the limits of your policy. If you have a $400,000 policy for your $500,000 home, then your insurer still only provides $400,000 of compensation after a total loss.

Many homeowners are underinsured because they’ve made recent upgrades or repairs. Renovating your home could add significant value. If you didn’t update your insurance to match, then you may be underinsured, which means your insurer won’t cover the full cost of rebuilding.

How to Get Covered: Check your home insurance policy regularly to ensure it matches the full value of your home, including any upgrades or repairs you have made. Check building costs in your area. Consider getting a replacement value policy instead of an actual cash value policy for added compensation after a loss.

Service Lines

Insurance policies cover your house and most things inside your house. However, they don’t cover service lines coming into your home.

Your insurance policy covers the pipes inside your home, including leaking and burst pipes.

However, if a service line leaks or bursts, then it can cause significant damage to your lawn that isn’t covered by insurance.

Some policies do cover service lines. Other policies let you add service line coverage.

If you live in a condo or apartment, then service line coverage isn’t important. However, it’s more important for single-family homes, and you may want to check your policy for service line coverage.

It’s also important to check the condition of current service lines before buying a home. Ask for detailed inspections of sewage lines and drainage systems before you buy. If you detect damage before a sale, the seller may be required to fix this damage before closing, which could save you thousands of dollars.

How to Get Covered: Check for service line damage before you buy a home. Add service line coverage to your home insurance policy if concerned about potential costs.

Damage Resulting From Faulty Smoke Alarms and Other Safety Systems

You buy smoke alarms to alert you of a fire. If your smoke alarm malfunctions, however, then you still expect your insurer to cover the damages.

Unfortunately, that may not be the case: insurers may deny claims due to:

• Faulty sprinklers
• Missing smoke detectors
• Smoke detectors with dead batteries or no batteries

You have a responsibility to maintain your home and all appropriate safety systems. If you failed to maintain your home’s safety systems, then your insurer could deny your claim.

Similarly, homeowners insurance companies may deny claims if you have certain safety feature discounts. If you asked for a hurricane-proof door and window discount, for example, without correctly installing hurricane-proof doors or windows, then your insurer could deny future wind damage insurance claims.

How to Get Covered: Maintain home safety features to avoid future claim denials. Check safety systems regularly. Use licensed professionals to install home safety features.

Break-Ins Caused by Faulty Security Systems

Just like homeowners insurance doesn’t cover damage caused by faulty smoke alarms and other safety systems, it also doesn’t cover break-ins caused by faulty security systems.

If you received a 15% discount on homeowners insurance for having a home security system, for example, then you’re expected to maintain that system throughout your policy.

If you failed to maintain your home security system, or if you disabled your security system and someone broke in, then your insurer could deny your claim.

How to Get Covered: Maintain your home security system, set it when you leave the house, and check it regularly – especially if your home insurance company has given you a home security system discount.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.