What Does Homeowner’s Insurance not Cover?

April 7, 2020

You probably think if you take out a homeowner’s insurance policy that it covers everything to do with your home, right? Unfortunately, that’s not the case. Homeowner’s insurance does provide financial protection for your home, but only in certain situations.

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Check out the top things homeowner’s insurance doesn’t cover below.

1. The Current Replacement Value of your Home

Don’t assume that your insurance will pay the full current value of your home to replace it should you have a total loss. Unless you pay for replacement cost coverage, you may be sorely disappointed. Without replacement cost coverage, insurance companies only pay the fair market value of the cost to replace the home.

2. Not all Natural Disasters are Covered

Storm damage and even hail damage may be covered under your insurance, but if you live in an area where there are tornadoes or earthquakes, you may find that you need a separate policy for these occurrences.

3. Flood damage

If you live in an area prone to floods, it’s important to add a flood policy to your homeowner’s insurance. Your standard policy won’t cover damage from a flash flood or water damage caused by natural occurrences. It may cover damage from sudden water damage inside the house, but anything external won’t be covered.

4. Sewer Backups

While there’s nothing you can do about a sewer backup, your insurance may not cover the damages. If you live near a sewer and worry that you may be subject to this issue, inquire about additional coverage specifically for sewer backups.

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5. Lack of Care

If you don’t take proper care of your home, your insurance policy may not cover the issues. For example, roof damage is usually covered when it occurs as a result of an outside issue, such as weather. If it occurs because you never inspected or maintained it though, and the insurance company can prove it, they may deny your claim.

6. Contractor Damage

It’s important if you have work done on your home to ensure that the contractors have proper insurance coverage. If they damage your home, your homeowner’s insurance policy won’t likely cover the damages. This could leave you with serious financial distress as you scramble to pay for the repairs along with the cost of the construction.

7. Limited Personal Injury Coverage

While most home insurance policies cover personal injury (someone getting hurt on your property), you should know the amount of coverage. Is it enough to protect you? Are there any serious liability issues on your property that may prompt you to need more coverage? Don’t assume you’re covered for every incident – know the total and determine if it’s enough for you.

8. Identity Theft

In today’s technological world, we need to protect ourselves from identity theft, as it’s a serious threat. While home insurance does cover liabilities that happen to you personally, not just at your home, identity theft is a separate policy. If you want protection, you’ll need to add an endorsement. It typically doesn’t cost too much and it can be worth its weight in gold if you need to use it.

9. High Valued Items

Take an inventory of your assets. Do you have high valued items in your home? Your general homeowner’s insurance policy may not cover them. Each policy has a maximum, which is an average of $1,000. Check with your policy and see if you need to purchase an additional endorsement for certain items. Again, it typically doesn’t increase your premium too much, but it provides exceptional financial coverage should you need it.

10. Termite Damage

Termites are an issue in certain parts of the country and definitely on wood homes. If you live in an area where termites are common, you may want extra coverage. You should also consider having regular pest inspections completed so that you can catch the issue in its earliest stages to prevent long-lasting damage.

Homeowner’s insurance does protect you against many things, even things that don’t occur at home, but knowing what it doesn’t cover is most important. You can look at these items and decide if you need coverage for them. Adding additional coverage is usually just a few dollars a month and can provide exceptional financial coverage should you need it. Look closely at your policy so that you know where you stand and what you may need to change.

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