Whether your home is hit by lightning, hail, or some other calamity, you’ll be awfully glad you have a homeowners insurance policy in place to help foot the cost of repairs. Yet while home insurance typically covers a variety of common hazards that can befall your home, don’t get too confident, because it may not cover every mishap that may come your way. The exact instances that are and aren’t covered by a typical home insurance plan depend entirely on the details of your policy—and, contrary to what you may think, each policy is different.
“Insurance policies are like snowflakes; no two are exactly the same,” says Ashleigh Cloud Trent, an insurance adviser with Swingle Collins and Associates in Dallas. Generally speaking, most home insurance policies cover natural disasters, certain crimes, and accidents. Think: Wind and hail, dog bites, theft and vandalism, snowstorms, burst pipes. Beyond that general framework, however, there’s no blanket guarantee you’ll be covered. Don’t bank on your insurance company footing the bill for the following unfortunate situations.
1. Does home insurance cover floods?
If the “flood” you speak of is a puddle of water from a burst pipe, yes, insurance should cover it. But if the flood is due to excessive rain, a hurricane, or an overflowing river, most standard home insurance won’t cover it. The National Flood Insurance Program defines flooding as “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.” “Many homeowners don’t realize that flood damage is not covered under typical home insurance policies,” says Amy Danise, chief insurance analyst at Forbes Advisor. “With many parts of the U.S experiencing floods, this is one of the biggest mistakes a homeowner can make.”
With both floods and earthquakes the damage caused by these natural disasters can be so extensive that private insurance companies can’t afford to provide coverage for all or will only provide costly policies to select homeowners. Luckily, though, the federal government has stepped in, and is now the primary seller of flood insurance. If you live in an area that’s prone to floods, you’ll want to purchase this additional flood insurance. This is especially true since flooding tends to cause expensive damage—even 1 inch of floodwater can result in $25,000 in repairs, on average. So don’t buy a home in a flood-prone zone without it!
2. Does home insurance cover earthquakes?If you live in an area with earthquakes, you’ll need to purchase additional insurance here, too. Most insurance companies offer special earthquake policies or, if you live in California, you can purchase it from the California Earthquake Authority (most Californians live within 30 miles of an active fault line, so it makes sense to do so). Your insurance company may offer you a discount or even a rebate when you pay for certain improvements that help your home better withstand earthquakes.
3. Does home insurance cover water leaks?It depends. Damage caused by slow leaks—technically “seepage and leakage”—can be denied coverage. Water damage has to be “sudden and accidental,” explains Trent. “A prime example is a client whose contractor nicked a pipe behind a wall. The pipe was connected to a seldom used guest bathroom, so nobody noticed the leak,” he recalls. “When they rented out the home years later, the tenants called a few months later, to report that the floorboards were warping.” The slow leak caused $25,000 in damage—and the homeowner insurance didn’t pay out a nickel.
4. Does home insurance cover mold?This depends on what caused the mold to appear. A policy might cover mold if it’s the result of a “covered peril,” such as water damage from a burst water heater or firefighters dousing flames on your home. However, mold won’t be covered if it was caused by perils outside your policy, such as flooding or preventable ongoing problems, like a slow water leak or high humidity.
5. Does home insurance cover sewer and drain backups?If the sewer backs up and fills your house with water, you might have to clean up the mess yourself—and on your own dime. “In a lot of places, when there’s serious rain, the sewers and drains can back up into people’s homes,” says Trent. “Not all policies will cover that.”
6. Does home insurance cover wear and tear?Sorry, your home insurance policy also won’t pay for damage caused by normal wear and tear. They’re there for actual emergencies that can’t be avoided, not damage that could easily have been prevented. So make sure not to neglect little problems at home that could balloon into bigger problems later on!
7. Does home insurance cover damage from renovations?A lot of homeowners don’t realize they need to take out a specific renovation policy if they’re doing major work, even if the contractor has a builder’s risk policy. According to Trent, the builder’s risk policy covers only new construction, not the existing structure. “It’s OK if you’re just doing cosmetic updates; but if you’re taking the roof off, that’s more than a standard homeowners’ policy is designed to protect,” she says. Even if the house is a tear-down, a renovation policy will cover any liability issues for people who wander onto the property and get hurt. “If someone gets hurt on the property, you’re liable,” she explains. “If neighborhood kids are playing around in the empty house, that’s your liability.”
8. Does home insurance cover historically accurate repairs?If you live in a landmark area and you need permission from the historical society to make changes to your home, there might be a cap on how much your insurance will pay to fix a problem. And the historical society might dictate the kinds of material you must use on your home, no matter how expensive it is. “A hailstorm decimated all of these historic homes in Dallas recently,” says Trent. “What should have been a $9,000 vinyl siding repair ended up costing homeowners $90,000, because the historical society insisted they use” a specific type of shingle. A typical policy would not have made up that difference.
9. Does home insurance cover acts of war?“If the U.S. government determines we are at war, and your home is destroyed as a result of the war, you will not be covered,” says John Espenschied, agency principal at InsuranceBrokersGroup.com. Destruction from acts of terrorism, however, is generally covered.