Before we dive into what is not covered, we think it is essential to learn that not all policies are the same. Some insurance companies may have slight differences in their policies, and some policies are written with less than standard coverage.
For this article, standard coverage will be a policy that insures your home and personal belongings using replacement cost, not actual cash value. The difference is explained further in our article How to Get Homeowners Insurance. But replacement cost coverage is what most owners want and what we typically advise.
It simply means that the insurance company will pay what it takes to replace something, even if it costs more today than what you paid when you bought it originally. Knowing that this article is about a typical homeowner’s policy, we can start reviewing what will not be covered.
Earthquake and Earth Movement
Earthquakes happen underground and make the surface move around and rattle buildings. Sometimes, heavy rain can cause a mudslide down a hillside. In some parts of the country, sinkholes are not uncommon.
None of these are covered on a homeowner’s policy. If an insurance company cannot determine the odds of an event, it will not provide insurance. Since the technology does not exist to predict earthquakes, sinkholes, or mudslides, the insurance company cannot take on the risk for those events.
However, many companies will allow you to pay extra to have earthquakes covered by the policy. Since the insurance company is willing to take on the risk, they will charge you for that risk. How much they charge will depend on the insurance company and where you live.
Here in Central New York, earthquakes are typically not very severe, so the cost of adding this coverage is probably less than if you own a home in earthquake-prone areas like California. Your agent can help you determine the cost of including this in your policy.
The standard policy does not cover floods, but you can purchase a stand-alone flood policy separate from your homeowner’s insurance. When most people think of a flood, they envision a lake or river overflowing its banks.
No question that it is a flood, but that’s not the only type. According to the Federal Emergency Management Agency, a flood is two or more acres of land covered in water or two adjacent pieces of land with standing water.
That means if the area between your house and your neighbor’s house gets standing water, that is a flood. And if that happens, your homeowner’s policy will not cover the damages caused by that water. Purchasing a flood policy is usually not very costly if you do not live near a body of water like a stream, river, or lake. However, flood plains can be deceiving, so do not assume distance from a body of water keeps you from experiencing a flood.
Water and Sewer backup
If your basement has a sump pump that stops working and causes it to flood, that is not automatically covered. Some policies will include a small amount of coverage for you, and most will allow you to add it at an additional cost.
If the sewer line going out to the street or septic system gets clogged over time and backs up into the house, that is not automatically covered. Again, some policies may provide small amounts of coverage, and most will allow you to add coverage for an additional cost.
Make sure when you buy this coverage, or buy more of this coverage, that you are getting enough to cover your possible risk. An unfinished basement with the furnace elevated on a platform will not experience much damage.
But if you have a finished basement with a bathroom and bedroom, that can get expensive to repair or replace. If you purchased ten thousand dollars of coverage, that’s all you get. If the carpet, sheetrock, furnace, and furniture become ruined, ten thousand will not likely cover the entire bill.
Act of War
According to the Cornell University Law School, the definition of an act of war is the following:
The term “act of war” means any act occurring in the course of— (A) declared war; (B) armed conflict, whether or not war has been declared, between two or more nations; or (C) armed conflict between military forces of any origin.
The last one (C) could involve a militia group within a country against the government of that country. Defining the last one could get murky because there can be a fine line between rioting and civil unrest and an organized militia.
We have some further details, and a video on this topic in the article Are Acts of Terror or War covered on home and auto policies?.
Maintenance issues include several topics not covered by your homeowner’s policy. Some of these are easy to determine, and others can be more challenging. The following is a list of items not covered with a brief description:
Mechanical failure – if your dishwasher stops working, that would not be covered by your policy. However, if it leaks and the water causes damage, that would likely be covered by your policy.
Rot or mold – if you discover rot or mold inside a wall or home structure, that will not be covered. Mold and rot will often develop in places you cannot see, like under the front door jam that unknowingly has let water underneath for years.
Termites and other insect damage – termites, carpenter ants, and carpenter bees are all examples of infestations that your policy would not cover. Sometimes there are signs of this occurring (bees flying around a particular location of your home indicates a hive entrance). Sometimes the termite damage can be years in the making.
General wear and tear – an easy example is a water heater. Water heaters need replacing occasionally, and your policy does not cover the replacement cost. If the unit leaks in your basement and causes damage, that is likely covered by your policy.
Smog or smoke from industry or agriculture – imagine years of smog or soot blowing by your home and fading to one side of your home. It is a gradual process and not easily noticeable, but any damage caused by this will not be covered.
Did you commit arson by starting a fire with the intent of damaging your property? That will not be covered. Did you accidentally knock over a candle causing a small kitchen fire? Your policy would likely cover that because you did not intend to cause damage even though you intentionally lit the candle flame.
Perhaps you were at a sporting event, and a fan sitting behind you has been obnoxious, supporting the opposing team. If your solution is to turn around and bop them in the nose to shut them up, then any lawsuit by them will not likely provide liability coverage for you.
If you run a business out of your home, you should have a business insurance policy. If you have a salon at home and someone gets hurt walking in or out of your home, you do not have coverage.
If you make pottery in your home as a business and the kiln malfunctions and starts a fire, the insurance policy may not provide coverage. Always check with your agent if you operate a business out of your home.
Please note there is a difference between “working from home” and “running a business from home.” If you have a home office and perhaps write articles about insurance for your employer, that is not “running a business from home.” So if you just got back from vacation and are catching up on emails after dinner with the family, that’s not a problem (at least from an insurance perspective).
Your policy does not cover power surges that come through the power grid from outside your home. Imagine a transformer malfunction sending a surge of power through your home, damaging your TVs and other electronic devices. Your homeowner’s policy does not cover that.
What if a circuit breaker in your electric panel malfunctions and is the cause of the surge? Because the surge was caused by something inside your home, you likely have coverage.
What about lightning striking your home? If lightning causes a power surge in your home, damage to electronics is typically covered. It is a good idea to have the electronics plugged into a surge protector to help prevent this damage.
Please note that not all power strips have surge protectors. Make sure you use the proper equipment. Further information about this topic is in an article on whether surge protectors are needed for appliances.
The most well-known event in this category is eminent domain. Sometimes the government decides that your property is not as important as a road expansion or a new bridge, and there is no protection included in your policy for this event.
If the police have a warrant to search a home and decide it is necessary to break the door down for entry, that damage will not likely be covered by your homeowner’s policy.
You hire a contractor to build a nice deck off the back of the house. The job is finished, and everything looks great. You especially appreciate that they used hidden fasteners, just like you requested, for a clean look. But you wake up the following day to have a cup of coffee on your new deck only to find it collapsed overnight.
You learn that the “hidden fastener” they used was white glue from elementary school crafts, not a nail or screw, or bolt to be found. Your policy would not cover this damage, and you must go after the contractor.
Another example, and one that is more likely than that exaggerated example, is that you had some windows replaced a few weeks ago. A heavy rainstorm comes through, and you get water inside your house. It is determined that the windows were installed incorrectly; damage will likely not be covered.
Diving boards and trampolines
These two items are not automatic exclusions from a policy, but they get excluded often enough to mention in this article. For some insurance companies, it’s a hard stop if you have a trampoline or diving board. Others may limit the amount of coverage included in the policy.
Regarding the diving board, one company may be okay with having one, provided it is inside a locked fence area, limiting access only to family and guests. If you have either, check with your agent because you do not want to learn after an injury or incident that you have no coverage.
Do you have pictures on your walls? Do you have coats in your closets? Do you have any jewelry in your home? Most folks answer “of course” to these questions. Does your homeowner’s insurance policy cover them? Yes, but there may be limits to how much coverage you have. We cover this topic in more detail in our article “How Should I Insure My Most Valuable Things?”
If the picture on your wall is a Picasso painting, that will not be insured for more than a few thousand dollars by your policy. Is one of the coats in your closet made from expensive fur? Also, their limited coverage may not be enough to replace it if damaged in a fire or other event.
What about the Steinway piano in pristine condition in the family room (even if never played anymore)? That will have limited coverage. The wedding ring from Grandma that sparkles brilliantly from all the diamonds? Also limited coverage.
Certain items like this are covered, but only for a maximum amount, typically around $2,500, although this number will vary by insurance company. While not an exclusion, it is limited, so we wanted to bring this to your attention.
Suppose you can provide an appraisal by a legitimate source (meaning a local jeweler compared to a printout from a webpage) and provide that to the insurance company. In that case, you can typically purchase coverage for that item.
So if Grandma’s ring gets appraised for $15,000 and you want to insure it for that amount, the insurance company will let you know what it will cost to add that to your homeowner’s policy. The term you will hear for doing this is “scheduling the item.” Read this article about the schedule of insurance for further information.
Building ordinance or law
Building codes change over time as materials and technology and safety rules evolve. Depending on the damage you experience, you may be required to obtain a permit before repairs or replacement to your home are allowed. During the permit application you are told by the local code enforcer that you are required to update your electric system to today’s standards.
That will increase the cost of the repairs, and often that cost is either not included in your coverage, or there is a limit to how much will be covered. The portion of extra cost will be at the homeowner’s expense.
Some insurance companies allow you to add more coverage for this category, and good news it is not very expensive because this does not happen often to a homeowner. But again, we wanted to bring these potential issues to your attention.
You are excited about your kitchen renovation being finally started. Removing the wall between the kitchen and the dining room is going to open things up and add so much more natural light to the kitchen. The demo is almost done, and the wall gets removed.
You come home from work and find your second-floor bathtub in your kitchen, because that wall that got removed was a supporting wall. That will not be covered by your homeowner’s policy, you will need to have your contractor fix this at their cost. Or perhaps the architect who designed all this did not do their job well at all, they may have liability for this event.
Therefore it is so important to make sure any contractor or professional involved in any construction project shows you proof that they have insurance before they start their work.
Turning your knowledge into power
Based on what you have learned, you now know that there are times when a home insurance policy would have let you down. Knowing what isn’t covered beforehand gives you the power to make changes or upgrades to the policy as needed.
If you’d like to increase your home insurance knowledge further, we recommend reading “Does Homeowner’s Insurance Cover Everyone Who Lives With Me in 2022?”. For an even deeper dive you can read “How to Get Home Owners Insurance in 2022.”
If you’ve had just about enough insurance knowledge, and are ready to turn things over to us, tap the Get a Quote button below. Or, if you have a question we haven’t answered, use the contact us form below, and one of our insurance pros will provide an answer ASAP.