As much as insurance is meant to cover the things you can’t plan for, the inverse is also true: you need to plan for the things insurance doesn’t cover. Too often people file home insurance claims, only to find out too late that they’re liable for the high cost of damages themselves.
Sometimes, it’s a simple matter of gaps in coverage, where someone thought they were protected but either had insufficient or incorrect coverage. Those issues can usually be addressed by either upgrading a policy (before disaster strikes) or switching providers to one with better coverage options.
However, there are certain situations that aren’t likely to be covered by any insurance company, situations that can leave you on the hook for a lot of money if you aren’t prepared. Here are some of the most common:
Flooding
Home insurance does not cover damage caused by weather-related flooding. Many insurance companies do offer special coverage or water damage endorsements, but they only cover accidents occurring inside the home (or on the property), such as flooding caused by burst pipes. They won’t cover water damage caused by heavy rain or overflowing rivers.
If you think your home is at risk of flooding, or want the peace of mind of the added coverage, the government does offer protection through the National Flood Insurance Program.
Earth Movement
- Earthquakes: The most common earth movement damage is that caused by earthquakes. Special endorsements can be purchased for an extra fee in all states except California, but without them, no standard policy covers earthquake damage.
- Landslides and Sinkholes: Earthquakes aren’t the only forms of earth movement to consider. Standard policies also won’t cover the damage caused by sinkholes or landslides. Like with earthquake endorsements, some companies may offer this protection, but with the exception of the state of Florida (which mandates sinkhole coverage) they aren’t legally required too.
Wind Damage
Wind damage is unlikely to be covered under a basic home insurance policy in hurricane-prone areas, such as the Atlantic or Gulf coasts. In these areas, you will most like purchase added endorsements to your policy to cover the increased risk.
Simultaneous Events
The most common simultaneous event that could be problematic for homeowners is a storm that causes both wind and flood damage. Depending on your policy and endorsements, you could be covered for one, but not the other. If an insurance adjuster attributes all of the damage to the uncovered cause, you could be liable for the cost of damages from both.
Maintenance Neglect
Home insurance companies assign a certain level of responsibility to the home owner for performing both routine and preventative work on a home in order to keep it properly maintained and livable. As such, there are many maintenance-related issues not covered by standard policies:
- Burst pipes: As pipes age, they can become brittle and are at a greater risk or cracking or leaking. That risk can be exacerbated by any number of factors, like frozen pipes in winter, or some unlicensed, D-I-Y plumbing. The home damage caused by a burst pipe may be covered if you have extra water damage endorsements, but the cost of the actual pipe repair isn’t.
- Sewer Backups: Blockages, torrential rainfall, and even cracks caused by tree roots, can cause a sewer line to back up and flood your home. Unfortunately, these backups fall under the same category as burst pipes. The resulting damage may be covered if you have the special endorsements, but the cost of the line replacement won’t be.
- Mold: Rooms with high humidity such as basements, attics, or crawl spaces (or any room which experienced previous water damage) can be a breeding ground for mold. Mold growing on floors or walls can be a potent allergen and cause any number of respiratory problems. Because mold can easily be controlled with preventative maintenance, home insurance policies rarely cover it without additional, costly endorsements.
- Termites: Termite cause billions of dollars in damage to homes every year. The wooden beams that support your home are a food source that can sustain massive colonies of the pests, all the while slowly destroying your house with you none the wiser. Home insurance companies view infestation by termites (or any animal or pest) as a sign of neglect and will not cover the cost of damage.
- Ordinance changes: In some instances, new laws or government regulations could require upgrades on a home that isn’t otherwise damaged, such as updates to an aging (yet functional) natural gas pipeline. Some cities have even passed ordinances that required homes of a certain size to install fire suppression systems, at the cost of the homeowner. Some insurers offer added ordinance coverage, but a standard policy will not cover the cost of government-mandated upgrades. The same is also true if the government confiscates or condemns your home or property for any reason. Home insurance will not cover the damages.
Nuclear Accidents
Any damage caused by accidents at a nearby nuclear power plant are not covered by home insurance policies. However, federal law requires nuclear power companies to contribute to an insurance pool that will cover the costs of nuclear accident damage.
Acts of War
Living in the United States, being covered against acts of war probably isn’t a primary concern when purchasing home insurance. However, with the number of domestic terror attacks either executed or prevented over the past few years, more people are probably starting to think about it. As it stands, home insurance companies do not cover any terror attacks using nuclear, biological, chemical, or radioactive weapons. They are considered acts of war, and therefore uninsurable. However, those are extreme cases. Most insurance policies do cover damages cause by explosions, smoke, and fire, which are the most likely of an unlikely scenario.
Certain Dog Breeds
Many policies include coverage for the medical costs incurred in the event that a homeowner’s dog bites a guest or neighbor. However, some breeds with a reputation for being aggressive may be charged a higher premium, or not be covered at all. It’s important to always report dogs to your insurer to identity any breed-related gaps in coverage, or any extra steps needed to make sure that you are protected.