A homeowners insurance policy offers great protection for your home and belongings, but a standard policy won’t protect your property against everything. In the event of unexpected loss or damages, there are certain events that are excluded by most policies.
Understanding what most homeowners insurance policies don’t cover can help you decide if you need additional coverage (or money set aside) to ensure your property has the best protection for your wants, needs and peace of mind.
What Isn’t Covered by Homeowners Insurance?
Homeowners insurance policies can include “open peril” protection, “named peril” protection or both types of protection.
Open peril protection covers damages or loss caused by any event unless the event is explicitly excluded from your policy. A standard policy will provide open peril protection for your actual home (called the “dwelling” in insurance-speak).
Named peril protection covers only damages or loss caused by events that are explicitly listed in your policy. Standard homeowners insurance policies provide named peril protection for your personal property.
I’ve written about what homeowners insurance policies do cover in more detail here, but let’s take a close look at ten events that standard homeowners insurance policies usually don’t cover.
- Pet Damages
- Termites, Rodents and Pests
- Sewer Backups and/or Sump Failure
- Personal Injury Offenses
- Simultaneous Events
- Negligence, Wear and Tear, or Aging
Water damage resulting from natural flooding, rain or groundwater seeping into your home is not covered by a standard homeowners insurance policy.
According to the Federal Emergency Management Agency (FEMA), “There is no such thing as a ‘no-risk zone,’ but some areas have a lower or moderate risk,” of flooding. So, it might be worth reviewing FEMA’s flood maps to assess your area’s risk. If you live in a high-risk area, you may be required by law to have flood insurance.
Even if you don’t live in a designated flood zone, homes located near smaller bodies of water or in areas with poor drainage can put you at risk for water damage to your property from overflowing water, flash flooding or even melting snow.
Many homeowners insurance companies offer flood insurance through the National Flood Insurance Program (NFIP), which is partially funded by the federal government. There are also several private companies offering flood insurance. They typically offer more comprehensive coverage than the NFIP.
If you’re interested in buying flood insurance, be sure to purchase a policy sooner than later: Waiting periods generally apply before flood insurance policies become active. NFIP policies have a 30-day waiting period.
Earthquakes can be catastrophic to your home and belongings, but standard homeowners insurance does not protect against earthquake damage.
And assuming that you’re only at risk if you live near a fault line is, well, risky.
Notably, the increase in earthquakes in Oklahoma shows how earthquakes can be triggered by human activity. You can learn more about your earthquake risk through FEMA. The cost of earthquake coverage will vary depending on the risk for earthquake damage to your property along with other factors such as your property value.
3. Pet Damages
If you have pets, your standard homeowners insurance policy will not cover damages or loss to your property that has been caused by your pets. But you may have protection against injuries to others (or damage to their property) caused by something your pet does.
The liability coverage included with standard policies will likely offer protection against claims of damages or loss to other people’s property and for medical expenses resulting from dog bites. But some insurance companies have exclusions for certain dog breeds. Also, some states have laws that can impact your liability and protection against pet damage claims.
4. Termites, Rodents and Pests
A standard homeowners insurance policy will not provide protection against damages or loss caused by termites, rodents or other pests infesting your home. This means your policy typically won’t cover the removal of any pests or repair for damages caused by them.
Some companies offer protection against “wild animal” damages. But this protection will likely apply only to your dwelling, and individual insurers may have varying definitions of which animals you’re protected against.
Infestations, however, will most likely be seen as preventable by your insurer. This is why you won’t be covered, and insurance companies generally don’t offer added protection against termites or other pests. Pest control companies offer options such as termite warranties (also called bonds) – that can meet your pest prevention and treatment needs.
Money expert Clark Howard recommends a termite repair warranty (also known as a repair bond) over a termite retreatment warranty so that the pest control company will be responsible for treating and paying for damages caused by the termites.
“When you consider what a home is worth and the damage termites can do, that’s not covered by your homeowners insurance, buying a policy that includes a repair bond is the only way I’d ever want to go.”
Not only can mold cause damage to your property, but it can also make you physically ill. But because mold can usually be prevented, damage caused by mold isn’t typically covered as part of a standard homeowners insurance policy.
However, if you have mold in your home as a result of a covered event, your insurance policy might offer some protection. For example, if a pipe bursts and leads to water damage and mold growth, then you may be covered. But it must be clear that the mold is a direct result of a covered event.
Some insurance companies offer hidden water damage coverage as an endorsement that might give you protection against mold, but your best protection is prevention. Check out Insurance Information Institute’s mold prevention advice.
6. Sewer Backups and/or Sump Failure
Water backup from sewers or sump pump failure is not covered by standard homeowners insurance policies. And even if you have flood insurance, any water damage resulting from a sewer backup or sump failure will still not likely be covered.
For protection against water damage resulting from backups, you’ll need to purchase additional coverage from your insurer. Check out the Insurance Information Institute’s tips to protecting yourself from sewer backups for more information on what you can do to minimize the likelihood of sewer backups and resulting damage.
7. Personal Injury Offenses
While standard homeowners insurance policies do include personal liability coverage, they don’t offer protection against personal injury offenses.
What’s the difference? Personal liability coverage provides protection against claims of physical damages or losses. But personal injury coverage provides protection against non-physical damages or losses. This can include libel, slander, defamation, wrongful eviction or entry, false arrest or imprisonment and other non-physical offenses.
If, for example, you make a social media post that leads to someone suing you for slander, having a personal injury offense endorsement on your policy can help cover legal fees and/or settlements.
Simply put, sinkholes occur when water enters cracks on a rocky surface and dissolves the rock to the point of collapse. The collapse is what causes the section of land to fall in. If this happens, you should know that a standard policy will not protect your property.
The U.S. Geological Survey (USGS) estimates that 35%-40% of U.S. land is formed over rocks that make the land susceptible to sinkholes, but it says, “The most damage from sinkholes tends to occur in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, and Pennsylvania.” Some states require insurers to offer optional coverage for homeowners and while sinkholes can’t be predicted, there are signs to look for.
9. Simultaneous Events
In the insurance world, “concurrent causation” refers to damages to or loss of property caused by simultaneous or back-to-back events. Imagine that winds destroy part of your home during a storm, and the floods follow, sending water into the already-damaged part of the house. While the wind damage is typically covered, the flood damage won’t be (see #1).
When more than one event happens and these events combine to cause damages or loss, you might not be protected by your insurance if your policy includes coverage for one event but not the other. This is because many insurers have what are known as “anti-concurrent causation (ACC)” clauses that can impact how a claim is handled after simultaneous events.
10. Negligence, Wear and Tear, and/or Aging
Homeowners insurance doesn’t provide protection against damages or loss that happen because of negligence, general wear and tear or aging to your home or property. And any intentional damages caused by the homeowner or other residents in the home won’t be covered either.
As with a few other events on this list, insurance companies generally will not offer compensation for events that are considered preventable.
While there are many events that are not typically included in a standard homeowners insurance policy, it’s important to check your individual policy to be sure about the protection you have.
If you have a mortgage and live in a high-risk area for certain natural disasters, you may be required to purchase protection against these events when you buy your home.
Most homeowners insurance companies offer additional coverage options in the form of endorsements (also known as riders or add-ons) or separate policies so that you can get protection against events that a standard policy does not include.
While buying additional or separate coverage is, of course, more expensive, it might be worth it depending on where you live or your home’s features.