6 Things Not Covered by Homeowners Insurance

Check your policy for these exclusions before assuming your homeowners insurance company has you covered.

Some aspects of your home insurance policy are easy to understand, like rates and deductibles, but limitations and omissions can be confusing. Most people buy homeowners insurance because their mortgage lender requires it, but it really benefits the homeowner. It staves off unexpected expenses from accidents, weather emergencies, fires, and even liability claims that could put your home and financial future in jeopardy.

But despite having paid insurance premiums for years, there are loopholes and processes that could result in an insurance company denying your claim, for things that you probably think are covered.

Do you have enough coverage that will help you in a time of need? With the help of experts, we present six things not covered by homeowner's insurance—so you can prepare accordingly.

Acts of God

According to CNBC, "water damage accounts for more than 19 percent of the total home insurance claims." You'd assume if water damage is that common, your insurance company would surely pay out, but not so. Companies start their investigation by determining how the water got there: Was it a storm, flood, pipe burst, sump pump backup, or roof damage? Standard home insurance policies may have exemptions for certain acts of God that caused the water damage—for instance, they may not cover storm flooding, but may cover flooding from a burst pipe.

Ian Gutterman, CEO of Informed Insurance, says that "while [water damage] gets a lot of [attention] after every big hurricane or flood, many people still don't understand that a flooded basement is not covered." Even more surprising, he says, is the lack of roof coverage. "Many insurers now 'depreciate' roofs, meaning as your roof gets older, you get less coverage, and that can leave you facing a large bill," he explains.

Take out additional coverage

To cover "acts of God"—a catch-all phrase to include earthquakes, floods, and other uncontrollable incidents that could cause damage—homeowners must pay for additional coverage. For example, there is FEMA flood protection if you live in a flood-prone area and tornado insurance to guard against windstorm damage. To be sufficiently protected, consider the weather vulnerabilities in your region and the likelihood that your home could be affected by one of these incidents. It may be worth it to pay for these additional riders.

Gutterman warns that even if you have all the coverage you think you need, it's important to check for wind and storm deductibles. "These are in many policies now and are rarely proactively disclosed by agents," he says. "They are often 1 or 2 percent of your home's value, so a $500,000 house has a $5,000 or even $10,000 deductible when you thought you had a $1,000 deductible." Read your policy's fine print to see if weather events have different deductibles than those outlined in the standard policy documents.

Bugs, Pests, and Rodents

Imagine carpenter bees have buzzed their way into your attic and built a hive that costs thousands to treat, and your family can't stay in the house for a few days while these pests are evicted. Who pays for the treatment and temporary housing? Likely, the answer is you.

Trade bees for wasps, termites, rats, squirrels, birds, or any other creepy-crawly things that could make themselves cozy in a crawlspace, porch, awning, gutter, chimney, or other corner of your property. Infestations can result in extensive damage and expensive bills that many insurance policies do not cover.

Conduct maintenance to prevent infestations

Insurance companies see pest infestation as negligence on the part of the owner, who could have called a remediation company earlier or with greater frequency. Regular home maintenance should avert infestations, but if you plan to leave your home vacant for long stretches, four-legged and winged intruders are something to keep in mind. An insurance company isn't likely to reimburse for repairs and abatement caused by them.

Similarly, if your domesticated pets harm others on your property, insurance companies are likely to deny those claims, too. Dog bites, in particular, are a bone of contention, as are cat scratches and damage to fences or other adjoining spaces.

Cost of Rebuilding

According to survey results from Marshall & Swift/Boeckh, nearly 60 percent of homes in the U.S. are underinsured by at least 18 percent. A homeowners insurance policy is typically designed to cover the cost of rebuilding your house, but that figure changes over time.

If your home is in a historical district, for example, rising construction costs and stricter building codes could make an exact replacement impossible. A typical home insurance policy allows 10 percent of your dwelling coverage toward the extra expense of modern building codes, but policies vary.

Update your plan on a regular basis

Similarly, if you've made upgrades and significant repairs to your home, it's important to update your insurance policy to reflect those changes. Otherwise, the policy is likely pegged to the cost associated with your purchase of the home, not its true value years later.

Service Lines

According to Andrea Collins, home insights expert at Hippo, service lines are out of bounds on most insurance policies. "While the pipes inside your house are covered by your homeowners insurance policy if they leak or burst, typically service lines on your property aren't," she says.

"Financial costs can add up quickly for a burst pipe on your front lawn, so be sure to ask your provider if it's included in your coverage limits or look for an insurance provider that offers it as an option to purchase with their policy." This is less an issue for those living in condos or big buildings, but for folks in single-family homes, it's a major concern.

Inspect the property and get third-party coverage

Evaluate the condition of service lines before you buy the home by asking for detailed inspections of sewage lines and other drainage systems. Often, damage detected before a sale can be offset before closing by the seller's credits or repairs at the seller's expense. You can also purchase a third-party insurance plan that covers these lines if they seem old or liable to become damaged in the near future.

Faulty Safety and Security Systems

Richard N. Estrella, director of operations at Estrella Insurance, advises that homeowners get all the discounts they are entitled to. One way is to share with your insurance company if you've installed safety and security systems like hurricane-proof doors and windows, security systems and cameras, and fireproof electrical systems. (Some insurance companies offer discounts of up to 15 percent for having a home security system.) Remember that if you say these things are in place, you're expected to keep them throughout the life of your coverage.

Keep your security systems up to date

Insurance companies may cite a missing smoke detector, faulty sprinklers, or a disabled security system to deny a claim that might otherwise have been covered. While initial insurance discounts can be valuable, these systems and auxiliary items are subject to natural deterioration, and their maintenance can easily be delayed or overlooked given a homeowner's long list of to-dos. Keep a checklist of these necessary maintenance tasks to ensure your coverage remains secure.

Normal Wear and Tear

Eventually, there will be some pretty big-ticket repairs that'll need to be made to your house, whether it's a new roof, a new HVAC system, or a garage door that's past its prime.

Unfortunately, those kinds of repairs fall outside the coverage of most homeowner's policies—so don't look for your insurer to pony up for it.

Plan ahead for repairs

Nothing lasts forever, so you should ensure that you're ready for that inevitable moment where you need to call in the pros and replace your appliances or home fixtures. Potential ways to cover this include paying for a home warranty, which often covers appliances and systems; having a home equity line of credit available to cover the cost; or creating an emergency fund that's dedicated to covering home repairs.

For some big-ticket repairs, the companies who perform the service may even be able to provide financing to help you cover the work. And don't forget that as part of the Inflation Reduction Act, many home repairs, including new energy-efficient HVAC systems and electric stoves and dryers, could net you tax credits or rebates to help offset the cost.

Homeowner's Insurance FAQs

What does home insurance cover?

Typically, a homeowner's policy covers your home and personal property, including any attached structures (i.e. your attached garage), fixtures, and built-in appliances, and will also protect you if someone is injured or suffers other damages on your property, according to the National Association of Insurance Commissioners (NAIC).

If you have a covered loss—such as a theft, on-property injury, fire, lightning, or other damage—it will help you cover your financial losses. But depending on your policy, you may need to pay extra to get additional coverages to help you cover damage from a sewer or drain backup, earthquakes, flooding, windstorms, and more. If you have valuable personal property (like expensive jewelry or antiques) that are worth more than the basic insurance coverage, you will need to have additional riders to specifically cover their value.

Keep in mind that you will still need to pay a deductible before your insurance starts to pay toward a loss. The average homeowner's deductible is $500, according to Insurance.com, which means if a fire does $10,000 in damage, you will pay $500, and your insurer would cover the additional $9,500.

What is the 80% rule in homeowner's insurance?

Also known as the coinsurance clause, this rule requires you to maintain coverage for at least 80 percent of the insured property's actual value in order to be considered fully covered. Keep in mind that some insurance companies may require a different value, such as 90 percent or even 100 percent of the property's value. If you fail to insure your home for that amount (for instance, if you only cover half of the value), you'll have to cover more of the loss out of pocket, according to the NAIC.

How do I check my homeowner's insurance coverage?

If you've read this far, you're probably wondering exactly what your own homeowner's insurance policy covers. Your insurer likely sent you full documents when you opened the policy, plus smaller documents with any coverage changes each year when your homeowner's policy came up for renewal.

If you don't have those documents on file, you can call your insurance agent or company to get them sent to you, or you may be able to access them online.

When might I consider switching insurance companies?

It's never a bad time to shop around for homeowner's insurance, as you may be able to reduce your costs (especially if you have multiple policies—like car or life insurance—with the same insurer). You may also find an insurer that provides coverage that better suits your needs, or offers better customer service.

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