Things Not Covered By Homeowners Insurance
Homeowners insurance covers a lot of head-ache issues, but many consumers confuse a basic home insurance policy with full umbrella coverage. If you are a homeowner it’s important to know what is and what is not covered.
In many cases the additional coverage is a simple add-on to your current policy. You can also save some money by consolidating them under one insurance company – by bundling your home insurance you can save anywhere from 10 to 25%.
Below is a list of 8 things not covered by homeowners insurance.
#1.) Flood insurance
If you live in a flood-prone area, the Federal Emergency Management Agency (FEMA) requires that you have flood insurance. However, even if you reside in a relatively dry climate, you can consider flood insurance to cover damage that may result from storms, thaws, inadequate or overloaded drains, or hurricanes.
Standard homeowner policies do not protect your home or belongings from water damage.
FEMA estimates that 20 to 25 percent of flood insurance claims come from high-risk external areas.
You can buy flood insurance almost any time if you live in a community that participates with NFIP, unless a flood is imminent. And there is a 30-day waiting period before flood insurance goes into effect.
Flood insurance also does not cover flood-related basement damage in all circumstances. Although limited, flood insurance is the best way to protect your basement in the event of a flood. Items like ovens, hot water heaters, ladders, and large appliances (like washers, dryers, and freezers) are generally covered. However, possessions, floors, walls, and ceilings are not.
Flood insurance does not cover damage caused by strong winds or hail, but you can buy it as an add-on to your usual homeowners policy.
There are several guarantees or supplements that you can buy to improve the coverage of your home insurance plan. However, most policies do not cover any damage that results from a flood. Therefore, your best option is to purchase additional flood coverage, if you live in an area where you think you are at risk.
#2.) Power Surge Damage
Electric storms can obviously cause flood damage, but your electronics are just as susceptible if you’re not careful. In many cases, if your computer is damaged during a power surge, the loss won’t be covered under your basic homeowners insurance policy.
Another occurrence that can happen is a power surge that’s triggered by a random issue with a power line or faulty cord. This also is probably not covered in your regular home insurance policy.
The good news is that there are exceptions!
Here are some events that are probably covered by your policy. You should check with our insurance agent/broker or check the policy itself though to be certain. What I’m writing is only general information.
- A massive blackout power surge in your area
- Power surge caused by lightning
- Damage caused by a falling tree during a storm
To be certain you can check your insurance policy that was mailed to you or online.
#3.) Wind, Water & Snow
Whether it be a plumbing leak or wind, gradual damage to your home is typically not covered under a homeowner insurance policy. You will likely have to pay out-of-pocket if shingles blow off one or two at a time, but will be covered if most of them blow off during a wind storm.
In most cases, gradual damage that is not sudden or incidental is not covered.
Homeowner insurance policies will also cover wildfires. According to an article on the California Globe, homes damaged by wildfires are now protected from being dropped by their insurance company.
#4.) Sewer or water backups
If a sewer or a water backup floods your basement, a standard homeowner’s insurance policy probably won’t cover the damage. However, coverage for sewer or water backups is available for a small price – as little as $30-45 per year, and it can be an add-on to your regular premium.
In many cases, homeowners often skip coverage for sewer and water backup to save money.
#5.) Spoiled food
If your home loses power or your fridge goes on the fritz, you’ll be sad to know that your home insurance policy is unlikely to cover the food that spoils. This might not seem like a big deal, but in the event that you keep Japanese Wagyu a5 ribeye in your freezer, you could be looking at a sizable loss.
Your policy won’t cover the loss unless you purchased extra “refrigerated property” coverage. Depending on your insurer, the “refrigerated property” coverage may cost as little as $25 per year.
#6.) Home inspection costs
Most home insurance policies provide up to 10% of the cost toward bringing your home up to city or municipal codes following something like a fire. But that may not be nearly enough to cover your loss. For instance, the cost to bring your home up to code may cost $3500. Under a standard home insurance policy, only $500 of that bill might be reimbursed to you.
Your homeowner’s insurance policy is designed to put you in the same position you were in prior to the loss. So if your home had a crawl space, but new building codes require you to build a completed basement, the extra expense of building a full basement would only be covered up to the 10% limit provided by the policy. In this example, you’d be left holding the bag for the rest of the cost of a code upgrade. Furthermore, your insurer will cover the cost of repairing or replacing only the damaged part of your home.
If your municipality forces you to tear down more of your home – or even all of it – you’d be stuck with the extra expense, including demolition, and debris removal.
#7.) Dog or puppy issues
If your new puppy uses your leather sofa or carpet as a chew toy or potty, your home insurance won’t pick up the tab for the damage. Unfortunately, there are no policies that cover damage caused by pets. But in this example, some home policies include limited coverage for loss of glass, such as a window. It may also be covered if you don’t own the home, and have renters insurance.
#8.) Unexpected house guests
If mice make their way into your basement and wreak havoc, the damage won’t be covered by a standard home insurance policy. Same with termites, or squirrels. Why? Because termites are considered “home maintenance” and mice and squirrels are classified as a “rodents”. Home damage caused by rodents is excluded under a standard policy.
The upside is that if the unexpected guest is a raccoon, or a bird (or any non-rodent creature), the damage will likely be covered through your policy.