Even the best homeowner insurance policy will not cover everything.
Termites. Mold. Flooding.
These words cause shivers down the spines of homeowners everywhere. They can result in significant repairs and expenses, and most typical home insurance policies do not cover the damage.
The specifics of what is and is not covered vary depending on your insurance, but even the best coverage will not reimburse you for everything. Here are ten frequent house insurance exclusions and how to fill up the gaps.
1. Ground movement.
Earthquakes, landslides, and sinkholes are often not covered by property insurance. Exceptions include Florida and Tennessee, where insurers must provide optional sinkhole coverage.
Aside from that, you’ll need separate coverage for these disasters, which your insurer can assist you with. For example, a “difference in conditions” policy can cover earthquakes, landslides, and other hazards including mudflows and floods.
2. Floods.
Most home insurance policies do not cover floods, such as those caused by overflowing rivers or excessive rains. Flood insurance is widely offered through the National Flood Insurance Program, which works with more than 20 different insurers. It can protect both the physical structure of your home and its contents.
In addition to floods, your house insurance coverage is likely to exclude other sorts of water damage, such as backed-up sewer lines or overflowing sump pumps. You can remedy this gap by adding a water backup endorsement to your policy. However, a standard policy will typically cover burst pipes, such as if the water pipe behind your washing machine bursts and spills water.
3. Mold
Mold coverage is tricky since it is sometimes difficult to determine the underlying cause of a mold infestation. For damage to be covered, your insurer must determine that the mold was caused by a sudden, accidental event that was a condition covered by your policy.
This implies that, for example, house insurers are unlikely to pay to repair mold damage caused by water from a long-term leak or inadequate home care. However, if the mold is caused by an unexpected plumbing leak, your policy may cover the repairs provided you move quickly to resolve the issue.
4. Wear and Tear
Storms, burglaries, and fires are examples of sudden or inadvertent catastrophes that home insurance is designed to cover. It is not a cure-all for everyday wear and tear. You must undertake basic maintenance to keep your home from falling into disrepair.
Maintaining your home’s roof, repairing worn-out flooring, and dealing with slow-leaking pipes are a few methods to avoid huge bills that your insurance would not cover.
5. Infestation.
Bedbugs, termites, mice, and other vermin are commonly excluded from property insurance for the same reason that wear and tear is not covered. From the standpoint of insurance, getting rid of bugs and repairing the damage left behind are simply part of house maintenance.
There may be a rare exception. For example:
- If the infestation results in a covered problem, such as a fire or structural collapse, you may be protected. A mouse nibbles through a wire, causing an electrical fire.
- If undetected termite damage causes a portion of your home to collapse, your insurance company may cover some of the repairs. However, if any termite damage was obvious before to the collapse, you most likely would not be covered.
6. Nuclear dangers
Home insurance does not cover nuclear accidents. Fortunately, you are unlikely to need it. Nuclear power firms must carry liability insurance to cover damages if you live in a hazard-affected area.
7. Government action
The actions of governmental agencies are not the responsibility of your insurance. If the government confiscates your things, condemns your home, and seizes the land, your policy will not cover the cost of repairing or replacing your property. The only exception could be if the government intervened to halt the spread of a fire that would otherwise threaten your home.
8. Dangerous or aggressive dogs.
Insurance companies paid out more than $1 billion in claims for dog bites and other dog-related injuries in 2023, with an average claim cost of $58,000. Certain aggressive or dangerous dogs may be excluded from coverage by insurance due to their high cost. Having one may even prohibit you from being authorized for coverage.
Some firms refuse to cover breeds known to cause serious accidents, such as pit bulls, Rottweilers, and wolf hybrids. Other insurers, such as State Farm, will not deny coverage based only on breed, but may consider an individual dog’s history of violence.
9. Wind damage in hurricane-prone states.
In most parts of the United States, typical homeowners insurance policies include wind damage. However, if you live on the Atlantic or Gulf coasts, where hurricane danger is highest, you may need to get additional wind insurance.
Wind damage can be costly, even if it is covered under your homeowners insurance policy. In 19 states and Washington, D.C., insurers may impose a separate wind, named storm, or hurricane deductible. Instead of a dollar sum, these deductibles are determined as a percentage of your home’s insured value, which typically ranges between 1% and 5%.
This can really pile up. For example, if your home is insured for $500,000 and you have a 5% wind deductible, you must pay for the first $25,000 in repairs. Not all companies allow you to choose your deductible amount, but if yours does, selecting as low as 1% or 2% can make a significant impact if you ever need to file a claim.
10. Intentional loss or neglect.
If your insurer believes that the damage to your house could have been avoided or was purposefully caused, you will not be covered. Furthermore, if you file a claim for losses that you intentionally caused, you may face insurance fraud charges.
