It doesn’t matter if you are just starting to gather quotes for your very first homeowners insurance policy, or if you have been insuring your home for many years, it is helpful to know what your policy covers. Exclusions from homeowners insurance are quite common.
You may be able identify coverage gaps if you know what circumstances are covered under your home insurance policy. You might be able to identify potential coverage gaps and take necessary steps to get coverage in cases that are not covered by your homeowners insurance policy. You can help protect your finances by planning for the unexpected.
Exclusions from home insurance
While the coverages offered by home insurers can vary, there are a few situations that are not generally covered by standard home insurance policies. These situations are often excluded from standard home insurance policies. You may need to purchase an endorsement or a separate policy in order to get coverage.
These are the most common exclusions from home insurance — and what you can do if you want coverage.
Floods
Flood damage is almost always excluded from homeowners insurance policies. Flood damage is almost always an exclusion from a homeowners /HO-3 policy. However, homeowners with /HO-5 policies that provide greater coverage than HO-3, are unlikely to be covered for flood damage.
Flood damage could prove to be a major problem for those who live in flood-prone areas. Just one inch of water can cause damage of up to $25,000. Flooding can occur anywhere, even though homeowners living in floodplains are aware of the need to have flood insurance.
You will need to buy a separate flood insurance plan in order to get flood coverage.
Earthquakes and earth movements
Damage caused by earthquakes and landslides are common homeowners insurance exclusions. Earthquakes, landslides, and mudflows are all common losses. You might consider buying coverage if earthquakes are a possibility, especially if you live near an area that is susceptible to them like California.
You may be eligible for earthquake coverage depending on your location and the frequency of earthquakes and earth movements. You may need separate earthquake insurance if you live in an earthquake-prone region.
Maintenance
You will likely need to perform some maintenance work if you own a house. This could be repairing or updating an appliance, or your plumbing and electrical systems. These repairs are usually considered maintenance, and almost all home insurance policies do not cover them.
You can prevent problems from becoming catastrophic by being proactive with your home maintenance. Consider setting aside money for home maintenance to ensure you are able to pay the bills if an emergency occurs. You can also purchase a home warranty if you are concerned about your ability to pay for home maintenance.
Pests
Most homeowners policies do not cover vermin infestations, including rodents and insects. Your home insurance policy will not cover the cost of eradicating and remediating termites, bedbugs, or mice in your home.
These types of losses are not covered by insurance policies that have an endorsement. A pest control company might offer a warranty that lasts for a specified period of time after treatment for the infestation.
Home-based businesses
Your home policy may include liability insurance to cover injuries that occur at your residence. However, this coverage typically does not extend to a home-based company. Your home insurance will not pay for the medical bills or any settlements if a client falls in your office. Many home insurance policies limit the amount of personal property you can have for business purposes. Some policies may not cover all items. You may be able to have very limited or complete coverage if your laptop is stolen while working remotely.
You may be able add some coverage to your home insurance policy if you have a home-based company or work remotely. You may need separate coverage if your business is larger.
Mold
Mold is usually an exclusion from home insurance unless it results in a covered peril. You may be eligible for mold remediation if your window is broken by a storm. For mold that grows slowly or is not easily identified, you’ll likely have to pay out-of-pocket for the necessary treatment and repairs. Although you may be able increase your mold coverage on your home insurance policy, this is dependent on the company.
The full price of high-value goods
Although homeowners insurance may provide some coverage for more expensive personal property such as jewelry, art, and collectibles (art, jewelry, etc.), most policies limit the payout to a dollar amount like $1,500 for all your jewelry.
You may be able to get endorsements from your home insurance company for more valuable possessions such as high-value jewelry. These policy riders usually list expensive items separately and cover them up to their full replacement value. Your home insurance policy may have a lower or no deductible, but the endorsement might have a lower deductible. This coverage may also be offered by your company as a separate policy.
Exclusions for home and auto insurance companies
There are many exclusions for home insurance that are common to most insurance companies. However, every insurance company is unique and each policy is different. Talking to your insurance company about your policy can help you determine if you require additional coverage.
Questions frequently asked
What are the reasons that some damages are not covered by home insurance?
Insurance for homeowners is designed to protect you against unexpected and accidental damage like storm damage and someone falling and getting hurt. Some exclusions are not included in the definition of accidental or sudden damage. For example, mold and pests can take time to become a problem. Floods and earthquakes are other exclusions that can cause so much damage that they deserve their own rating metrics. These coverages may not be covered under standard home insurance policies, which could allow insurance companies to offer less expensive standard coverage.
What does my policy cover?
Your paperwork should list the exclusions from your policy. To get a better understanding of the exclusions, you can talk to your agent or company. There are many standard exclusions for homeowners insurance. Many exclusions also depend on what type of policy is being purchased. However, exclusions can vary depending on the insurance company you choose, where you live, and your particular situation. If your roof is in particularly poor condition, you can amend some home policies to exclude coverage.
Are all home insurance policies exempt from the same exclusions
Common exclusions are included in many home insurance policies, such as earthquake and flood coverage. All companies are different. Certain companies might have coverages that are not usually covered. Some companies may have exclusions that are rarer in the industry. You can learn more about your policy by talking to your agent.