Homeowners’ insurance can cover a wide range of potential disasters that might affect your property and belongings, and some are wilder than others.
This wide coverage of potential issues can be very reassuring when it comes to filing a claim, but there are several scenarios that are still outside of the realm of consideration in a typical home insurance policy.
Being aware of your insurance details is vital, but it’s also crucial to know that it doesn’t provide you with easy access to what you need to know about your insurance policies.
You can find a great example of an insurance brokerage that’s transparent with its coverage at https://www.surex.com/Insurance/home/British-Columbia.
Continue reading to learn the answer to the question, “what does homeowners’ insurance not cover?”.
Natural Disasters are Covered by Home Insurance, But There are Significant Gaps in Coverage.
Assuming that any type of catastrophe damage is covered within the policy is among the largest misconceptions homeowners have regarding home insurance.
Depending on where you live, you may require a combination of extra lines of coverage. This is why homeowners need to ask themselves, “what is not protected by most homeowners’ insurance policies, and what is?”.
Flood damage, for example, is not covered by standard offerings. You’ll need to get a separate policy that covers flood damage, usually through the NFI program or an institution.
Things get a little complicated because other natural calamities can also trigger flooding. Flooding can occur due to earthquakes, for example, when dams fail and rivers or lakes overflow.
However, most insurance policies that cover earthquakes don’t extend to flood damage, so if flooding is a cause for worry, you may want to bolster your coverage to ensure both types of disaster.
Hurricanes can also be a problem to consider. If you reside in a hurricane-prone area, your coverage should naturally combine home and flooding insurance.
Those living by the coast would also benefit from supplemental wind insurance. It pays to speak with an insurance broker about natural catastrophe coverage because it can be multi-layered.
It’s Difficult to Repair Water Damage
Flood damage isn’t the only sort of water damage that can cost a lot of money. Even though water damage from compromised pipes and unexpected leaks is covered by home insurance, other forms of water damage are generally excluded.
Water backups in sewer systems and drains, for example, are common issues caused by big storms, debris clogging pipes, sump pump issues, and even excess root growth from trees on your property.
A conventional home insurance policy, on the other hand, excludes fluids that back up through a sewer system or drain and destroy your home.
In most cases, you’ll need to purchase additional insurance. This is something you need to keep in mind if you’ve been asking yourself questions like, “which area is not protected by most homeowners’ insurance policies?”.
Another Wrinkle in the Water-Damage Equation: Neglect
Your homeowner’s insurance coverage requires you to keep your home in good repair. If you don’t, your insurance claims may be denied.
If you turn off the heat in your home and pipe bursts, for example, your claim may be denied. It would be a costly blunder.
According to the insurance information institute, the average claim for water damage or freezing is around $10,900.
Rogue Renovation Projects Aren’t Covered by Home Insurance
Don’t go it alone if you want to improve your property. You may need building licenses from your municipality, depending on the size and scope of the project.
A building inspector may shut down your renovation or advise you to knock it down and start over if you don’t get the right permits or meet building rules. Homeowner’s insurance does not cover the expense of a rebuild.
A conventional homeowner’s policy will not cover problems arising from “ordinance or law” if a building inspector orders you to halt or restart a renovation. You won’t have the chance to file a claim for demolition, replacement materials, or additional labor because of this.
In the end, if you’re planning to renovate, be sure you have all of the necessary licenses.
It’s also pragmatic to check with your home insurance agent to see if you need to change your policy due to the remodeling. You may need to boost your coverage levels if the project increases the worth of your home or personal goods.
Homeowners Insurance Isn’t Going to Help You Clean Up a House-Sharing Disaster
Make sure you understand your insurance options if you utilize a site like Airbnb or HomeAway to rent out your property for extra money.
Because home-sharing is deemed “commercial usage” of your house, your homeowner’s insurance policy will not cover you if something goes wrong while you’re renting it out.
Your house insurance liability insurance, for example, will not cover medical bills if a home-sharing guest is injured on your premises. Similarly, don’t expect your homeowner’s insurance to cover the cost of a wild party that causes property damage.
If you plan to rent out your house, look into a home-sharing insurance policy and ensure it doesn’t have any major coverage gaps. Liability coverage is included in a decent home-sharing policy, and it covers other people’s injuries and property damage.
However, a superior home-sharing insurance policy will include other coverage kinds such as personal belongings coverage and even bed bug infestation coverage.
Loss on Purpose
Intentional acts are not covered by homeowners’ insurance. Home insurance, for example, will not cover you if you set fire to your shed on purpose.
There is a power outage. A conventional house insurance policy will not cover difficulties caused by power outages or other utility services that occur off your property, such as when your electric provider turns off the power for routine maintenance.
However, food deterioration caused by a power outage caused by a covered problem, such as a fallen tree that knocks out a power line, may be covered by your policy.
Wear and tear are inevitable. Homeowner’s insurance covers water damage caused by the falling of a tree on your roof during a rainstorm. However, it won’t cover issues like water leaks caused by deteriorated shingles caused by degradation and normal wear and tear.
Issues with Upkeep
Taking care of your home can help you avoid costly repairs that your homeowner’s insurance would not cover.
Many things that aren’t covered by your ordinary policy result from negligence and a lack of properly maintaining the property.
Termite and insect damage, bird or rodent damage, corrosion, rot, mold, and normal wear and tear are not covered. Pollution or smoke caused by industrial or agricultural activity are likewise not covered.
Almost often, if something is poorly made or has a hidden flaw, it will be eliminated from coverage. Similarly, any mechanical failure might be stated to be the same.
Furthermore, items such as food deterioration are not covered by a standard coverage if your home experiences a power loss.
There are Also Some Limitations
Your homeowner’s insurance does not cover damage caused by war or nuclear terrorism, which is something no one wants to think about. Identity theft expenses are also not covered. However, this coverage can be added as an endorsement.