Is Your Home Protected? What insurance may not cover

Homeowners insurance is designed to protect you against the high cost of property damage.

But just because you have home insurance doesn’t mean you have protection from all disasters and mishaps.

For example, most homeowners insurance doesn't cover flooding.

Yet flood damage in the U.S. totals $20 billion each year, leaving some homeowners to face thousands of dollars in uncovered flood damage.

Unless they have a separate flood insurance policy.

If your policy doesn’t list it, it's probably not covered.

And if you haven't read the fine print, you might not know if you're protected!

You can't protect yourself from everything that could happen. But you can’t assume you're covered either.

Below, we’ll share some things homeowners insurance usually doesn’t cover.

Armed with this information, you can determine whether you’re protected under your policy, need to obtain extra insurance, or should increase your emergency fund to self-insure.

Things Homeowner’s Insurance Usually Doesn’t Cover

Earthquakes, sinkholes, and landslides

Most homeowner's policies don't cover earth movement caused by natural disasters.

Earth movement includes earthquakes, sinkholes, landslides, and mudslides.

Separate earthquake and sinkhole policies are available through some insurance companies.

Mold

Homeowners’ insurance usually doesn’t cover mold damage caused by a preventable leak, flooding, or high humidity.

According to the Insurance Information Institute, exceptions occur when “mold is caused as a direct result of a covered peril such as a burst pipe.”

In this case, insurance covers mold damage but not repairs to the burst pipe since it is a maintenance issue.

Your best bet to protect against mold is to eliminate excess moisture in your home.

Stay on top of maintenance, use a sump pump in basements, and run dehumidifiers in high humidity areas.

And if you live in a flood-prone area, consider a separate flood insurance policy.

(Check the FEMA Flood Service map to learn more about flood hazard information in your area.)

Water damage from floods or sewer backup

You can’t count on your homeowner's insurance to cover water damage from flooding or sewer backup—unless you have extra coverage.

You need separate flood insurance to cover flooding.

Many insurance companies allow you to add a sewer backup endorsement to your existing policy too (for an extra charge!).

Water damage caused by a covered peril, like a burst pipe, usually gets paid by insurance if it isn’t from poor maintenance.

But insurance usually won’t pay for the cause of the water damage. In the case of a burst pipe, you're responsible for repairs to the line.

Construction work

Your home policy won’t cover a contractor’s poor workmanship or defective materials.

And, if a contractor damages your home, insurance might not cover the damage either.

Every good contractor carries liability insurance for this purpose (make sure yours is licensed and insured!).

If you’re doing extensive home renovations, consider buying builder’s risk insurance.

Your home business

If you run a home-based business, your policy might cover a small part of your equipment and inventory.

But the limits to this coverage are usually low and don't cover any extensive loss.

It also won't cover business-related liability issues.

Many home businesses should have a separate business insurance policy.

Termite infestation

Homeowner’s policies don’t cover damage from termite infestations. And, unfortunately, termites can cause extensive damage.

According to Orkin, “U.S. residents spend an estimated $5 billion annually to control termites and repair termite damage.”

Termite insurance policies don't exist.

You can get protection plans through pest control services (not insurance).

But the best way to protect against termite infestation is to maintain your home.

Check for foundation issues and keep woodpiles and food sources away from your home.

Expensive jewelry and art

Most companies insure jewelry and art, but most limit the basic coverage to $1500-$2000.

If you have expensive heirlooms or art, you can get an endorsement on your policy to cover them.

Before insurance covers these items, you usually have to get them appraised first.

Stolen cash

Most homeowners insurance provides $200 reimbursement for loss of cash (fire or theft).

Unfortunately, if you lose more than this, it isn't easy to prove you had it in the first place. It’s wise not to keep too much money lying around at home!

Trampoline and diving board accidents

Most insurance companies consider trampolines and diving boards as high-risk items. And many won’t cover any accidents caused by them.

Check the fine print or call your insurance company to find out if you’re covered.

War or nuclear accidents

Most insurance companies provide a war exclusion clause, so acts of war aren’t covered. Yet, some don’t consider terrorist attacks as war, so it’s possible to have coverage in that event.

Under federal law, insurance companies cannot cover nuclear accidents. Nuclear power plants must carry liability insurance to cover such events.

Some things that might be covered but deserve special consideration

Swimming pools. According to Bankrate, if you have a pool, you should have at least $500,000 in liability insurance.

If you don't have this much on your home policy, consider an umbrella policy for extra coverage.

Dog bites. The liability insurance included in most homeowner’s policies sometimes covers dog bites. But check with your insurance company to see if you’re covered – and make sure they know what breed of dog you have.

Dog bite claims are on the rise. And some insurance companies are taking measures to reduce their costs.

A few won't offer coverage to homeowners with high-risk dog breeds (like pit bulls). Some charge extra to homeowners with certain breeds. Others might ask homeowners to sign a waiver for dog bites.

Coverage varies, so it’s important to talk to your insurance company.

Guard against the things homeowner’s insurance doesn’t cover

There are some steps you can take to make sure you’re protected! Read on to learn more.

1. Review your homeowners insurance coverage.

First, you need to know what your policy does and does not cover!

If you find a gap in your insurance, you might be able to buy a separate policy to get coverage. Or, you could get an endorsement on your current policy for things like sewer backup and jewelry.

Even if you don’t own your home, it’s wise to have renters insurance to cover your personal property and provide liability coverage.

2. Decide if you need extra liability insurance.

Liability coverage on homeowner’s policies is usually between $100,000 and $300,000. If medical and legal expenses ever exceed this amount, you are responsible.

You can get a personal umbrella policy for extra liability insurance. An umbrella policy offers liability coverage over your home or auto policy limits.

There's always the risk that someone could get injured on your property. But some things increase your risk.

Consider an umbrella policy if you have a pool, dog, or anything that increases your chances of a lawsuit.

3. Keep up on home maintenance.

Home maintenance prevents damage that homeowners insurance might not cover.

Maintain the structure and mechanicals to avoid water damage, mold, and pest infestation.

4. Create a home inventory.

A home inventory is a list of your personal property. It helps you determine how much insurance coverage you need.

It’s invaluable if you experience loss or damage to your personal property and need to file an insurance claim.

Final thoughts

Now you know the things homeowners insurance usually doesn’t cover, and you can take steps to protect yourself!

Find out what your homeowner’s insurance covers—and what it doesn’t. Then decide if it’s enough – or if you need to secure additional protection.