6 Things Home Insurance Often Doesn't Cover
Standard homeowners policies leave out more than many people expect. Here's what to check in yours.
In this guide
Key takeaways
- Standard homeowners policies usually don't cover flood or earthquake damage.
- Damage from wear and tear, poor maintenance and pests is generally excluded.
- Sewer backup and high-value items may need extra coverage.
- Every policy is different, so check yours or ask your agent.
Introduction
Homeowners insurance covers a lot: fire, many kinds of storm damage, theft and liability if someone is hurt on your property. But a standard policy also has exclusions, and many people only find out about them after something goes wrong.
Here are six things a standard homeowners policy often doesn't cover, and what people do about them.
Advertisement
1. Flooding
Standard homeowners policies generally don't cover damage from flooding, such as rising rivers, storm surge or heavy rain that flows into your home. Flood coverage is usually a separate policy.
In the US, flood insurance is available through the National Flood Insurance Program and from some private insurers. NFIP policies typically have a waiting period before coverage starts, so it isn't something to buy at the last minute.
2. Earthquakes and earth movement
Damage from earthquakes, landslides and sinkholes is often excluded. Earthquake coverage can usually be added as an endorsement or bought as a separate policy. In some states, sinkhole coverage has its own rules.
9 more sections · 6 min read
Continue reading this guide
Watch a short ad to read the rest of this guide. You'll only need to do this once for this guide.
Not now, show me another guide →3. Wear and tear, and poor maintenance
Insurance is designed for sudden, accidental damage, not for things that wear out over time. A roof that leaks because it's old, or a pipe that has been dripping slowly for months, may not be covered. The same goes for mold that grows from long-term moisture.
Keeping up with maintenance protects your home and can help avoid disputes if you ever need to make a claim.
4. Pests and termites
Damage from termites, rodents and other pests is generally treated as a maintenance issue and is usually excluded. Regular inspections, especially in areas where termites are common, are the main protection.
Advertisement
5. Sewer and drain backups
If water backs up through a sewer line or drain into your home, a standard policy may not cover it. Many insurers offer a water backup endorsement for an extra cost. It's worth asking about, especially if you have a finished basement.
6. Expensive jewelry, art and collectibles
Most policies cover personal belongings, but they often have lower limits for certain categories, such as jewelry, watches, art and collectibles. If you own valuable items, you can usually add extra coverage by listing them on your policy, sometimes called scheduling them.
Business equipment kept at home may also have limited coverage under a standard policy.
Advertisement
How to check your own policy
- Find the declarations page, which summarizes your coverage and limits.
- Read the exclusions section of your policy.
- Look for any endorsements you've already added.
- Ask your agent or insurer about anything that isn't clear.
Why these gaps exist
Insurance is designed for risks that are sudden, accidental and spread across many homes. Floods and earthquakes can damage thousands of homes at once in one area, so they're usually insured separately. Wear and tear isn't sudden or accidental at all, so it's left to the homeowner to maintain.
Advertisement
Other things worth asking about
- Home business: many policies cover business equipment at home only up to a low limit, and don't include business liability.
- Short-term rentals: renting your home to guests may not be covered by a standard policy. Some insurers offer home-sharing coverage.
- Replacement cost vs actual cash value: actual cash value pays what an item was worth after wear and age, which can be much less than the cost of replacing it.
- Separate deductibles: in some areas, damage from hurricanes, wind or hail may have its own deductible, sometimes a percentage of your home's insured value.
A quick home inventory can help
If you ever need to make a claim, it helps to know what you own. Walk through your home and record each room on your phone, opening closets and drawers as you go. Save the video and any receipts for expensive items somewhere outside your home, such as cloud storage.
Advertisement
Conclusion
Homeowners insurance is broad, but it isn't unlimited. Flood, earthquake, maintenance problems, pests, sewer backups and high-value items are common gaps. A few minutes with your policy, or a short call with your agent, can show you where you stand before you ever need to make a claim.
Common questions
Does homeowners insurance cover water damage?
It often covers sudden and accidental water damage, such as a burst pipe. It usually doesn't cover flooding, gradual leaks or damage from poor maintenance.
Is flood insurance required?
It's usually required if you have a federally backed mortgage on a home in a high-risk flood zone. Elsewhere it's optional, but flooding can happen outside high-risk areas.
What is an endorsement?
An endorsement, sometimes called a rider, is an addition to your policy that changes or extends your coverage, such as adding water backup or earthquake coverage.
Sources and further reading
This guide is general information, not insurance advice. Coverage, exclusions and prices vary by insurer, policy and state. Always read your policy and talk to a licensed agent or your insurer about your situation.
