Johann Hunt
Ever wondered what could happen if your tree falls on your neighbor’s house and damages their property? Or what if your sewer backs up and floods your basement? These are just a few scenarios where your home insurance might not have your back. In a world where unexpected mishaps can happen, here are 15 risks your insurance policy doesn’t cover.
Flood Damage
The most significant gap in standard homeowners insurance is coverage for flood damage. Floods can occur due to heavy rain, hurricanes, or even melting snow, and they can cause extensive damage to your home and belongings. To be protected against flood damage, you typically need a separate flood insurance policy, which is available through the National Flood Insurance Program (NFIP) or private insurers.
Earthquake Damage
If you live in an area prone to earthquakes, like the West Coast or the southern coast of Alaska, you should consider purchasing earthquake insurance. This coverage can help repair your home and replace damaged belongings in the event of an earthquake.
Sewer Backup
Imagine coming home to find your basement flooded with sewage water due to a backed-up sewer line. Unfortunately, standard homeowners insurance excludes coverage for sewer backup unless you specifically add an endorsement to your policy.
Mold Damage
Determining if your insurance includes mold damage is complex, as it hinges on what initially caused the mold issue. Typically, if the mold stems from prolonged leaks, neglect in maintaining your home, or natural flooding, your insurance is unlikely to provide coverage. Conversely, if the mold arises suddenly due to an unforeseen issue, like a spontaneous plumbing leak, your insurer may cover the resulting damage if you promptly report it.
Termite Infestation
Insurers view infestations like termites as preventable issues, not sudden and unexpected events. Repair costs for severe termite damage can exceed $10,000. Therefore, if your home sustains wood damage from termites without impacting covered systems or contributing to other covered damage types, you’ll likely need to cover repair costs yourself, as insurance won’t apply in these cases.
Intentional Damage or Neglect
Deliberately damaging your property or failing to maintain your home could result in a denied insurance claim. It’s important to take proactive steps to protect and maintain your home to avoid these types of issues.
Home Business Liability
When you operate a business out of your home, your insurance will not provide adequate liability coverage for business-related risks. Depending on the nature and scale of your home-based business, you have to purchase additional coverage, such as a business owner’s policy (BOP) or a commercial liability policy, to protect against potential liabilities.
Power Outages and Utility Failures
Your insurance policy excludes coverage for damages due to power surges or outages caused by your utility provider or external sources. However, if the power failure originates on your property, such as a short circuit leading to a fire, those damages would typically be covered.
Landscaping
Insurance covers landscaping similarly to other personal property, but coverage applies only if damage is caused by certain perils. Unlike broader coverage for your other property, landscaping is eligible for reimbursement under your policy if damaged by specific perils, including fire, lightning, explosion, riot, civil commotion, aircraft, theft, or vandalism.
Identity Theft
Standard home insurance generally does not cover losses associated with identity theft or cybercrime, such as unauthorized use of credit card information or hacking incidents. However, some insurers offer optional endorsements or separate policies that provide coverage for identity theft expenses, including legal fees and credit monitoring services.
War and Nuclear Hazard
These risks are considered catastrophic and are generally excluded from standard insurance policies. Consider specialized insurance or government-backed programs for coverage against these types of risks if you live in an area prone to such events.
Specific Dog Breeds Liability
Usually, homeowners insurance covers medical and legal costs if your dog bites someone. But if your dog has bitten before or belongs to certain breeds, they might not be covered under your policy. The good news is some insurance companies have no issue with covering dogs in general.
Home Maintenance
Damage resulting from lack of maintenance or aging of your home’s systems and appliances is not covered. Implementing a regular maintenance routine and diligently addressing any repairs can help prevent costly damage and insurance claims.
Vehicles and Aircraft-Related Damage
Damage caused by vehicles or aircraft, like a car crashing into your home or a drone causing damage to your roof, is not protected by homeowners insurance. Vehicle-related damage may be covered under your auto insurance policy, while aircraft-related incidents may require specialized insurance coverage, depending on the circumstances.
Government Action
Government actions, such as changes in regulations, zoning laws, or eminent domain, are considered outside the scope of what homeowners insurance policies are intended to cover. These are generally considered broader societal or governmental issues rather than individual risks to a specific property.
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