10 areas that most home insurance companies don’t protect
Standard homeowners insurance typically excludes various types of damages, including earthquakes, flooding, sewer backup, and more. But most insurance companies offer supplemental policies, often known as insurance riders, to fill any gaps in coverage.
1. Earthquakes and earth movement
Most home insurance policies exclude coverage for earthquakes and other forms of earth movement. But you can usually purchase additional coverage for these events through an earthquake or earth movement insurance rider.
Earthquake insurance covers damage from seismic events, while earth movement insurance covers damage from a broader range of earth movements, such as landslides.
2. Flooding
Standard homeowners insurance policies don’t cover flood damage. For example, if a storm floods your basement and seeps through to your foundation, insurance won’t cover the damages. And flood damage costs can add up quickly — the average claim payout for water damage and freezing is $13,954, according to the Insurance Information Institute.[2]
You can purchase a separate flood insurance policy through private insurance companies or the National Flood Insurance Program (NFIP).
3. Home business
Standard home insurance may provide limited protection for a home-based business, but you’ll likely want to purchase home business insurance. For example, if your homeowners policy covers business equipment in the home up to $2,500, and a house fire destroys $10,000 worth of inventory, your home insurance will only pay $2,500, minus the deductible.
4. Neglect or wear and tear
Standard homeowners insurance policies exclude damage that results from neglect, which happens when the failure to take reasonable care of one’s property results in damage or loss. Insurance policies protect against unexpected and sudden damage, not issues caused by gradual wear and tear.
Homeowners are responsible for maintaining their homes and preventing damages, such as repairing leaky roofs and promptly addressing signs of water damage. For example, if you fail to address a leak in your ceiling, and it causes water damage to your floor, your insurance wouldn’t cover the damage.
5. Certain dog breeds
Some home insurance companies won’t provide liability coverage if you own a dog breed that they consider to be high risk, such as a Rottweiler or Doberman pinscher. But you can find dog-friendly home insurance companies that will provide coverage regardless of the dog breed you have.
6. Sewer backup
Most home insurance companies exclude damage from sewer backup, as they consider it to be preventable through proper maintenance. Insurers typically exclude sewer backup issues to keep premiums affordable and encourage homeowners to take preventative measures, such as regular sewer line maintenance and installing sump pumps.
7. Mold damage
Unless a covered peril causes mold to grow in your home, such as a pipe bursting suddenly, most standard home insurance policies won’t cover it. This means you’d be responsible for mold that occurs as a result of things like a gradual water leak or water seepage.
Some home insurance companies offer mold riders that you can add to your existing policy if you want additional coverage.
8. Pest damage or infestation
Insurance companies consider termite and pest damage avoidable through routine maintenance, such as regular inspections and termite treatment. They don’t consider it to be sudden and accidental damage, so they typically exclude it from standard homeowners coverage.
9. Power surges or outages
Home insurance sometimes covers damage to your personal property that occurs if you lose power due to a covered peril, like a lightning strike. But it may not cover damage from power outages caused by an artificially generated current. Check the details of your policy to determine if you have this coverage.
10. Valuable artwork and jewelry
Your homeowners policy may include coverage for artwork, jewelry, and other valuables up to the coverage limits. But if you want to protect your high-value items thoroughly, review your policy limits and consider purchasing additional coverage to ensure you can replace them if they’re stolen or damaged.
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