What Is Not Covered in Homeowners Insurance?

Homeowners insurance protects property and personal belongings against various unexpected events. While these policies provide broad coverage, they do not extend to every possible scenario or type of damage. Understanding the specific limitations and exclusions within a standard homeowners policy is important for homeowners to assess their risk and consider additional coverage options. This awareness allows for informed decisions regarding comprehensive property protection.

Natural Disasters and Catastrophic Events

Standard homeowners insurance policies do not cover damage from certain widespread natural disasters. Flooding, for instance, is a common exclusion. Homeowners need a separate flood insurance policy, often available through the National Flood Insurance Program (NFIP) or private insurers, to cover water damage from natural flooding, heavy rain, or water seeping from the ground. Damage from a burst pipe inside the home is usually covered, but floodwaters entering the home are not.

Damage caused by earth movements, such as earthquakes, landslides, mudslides, and sinkholes, is excluded from standard homeowners policies. These events can result in significant structural damage, and insurers consider them too widespread and costly. Homeowners in areas prone to seismic activity or ground movement can purchase a separate earthquake insurance policy or add an endorsement to their existing coverage.

Damage from water backing up through sewers or drains, or from sump pump failures, is not covered by a standard policy. This type of water damage can be substantial, affecting basements and lower levels of a home. An optional sewer backup or water backup endorsement can be added to a homeowners policy for such incidents, typically costing between $50 and $300 annually. Events like war, government action, or nuclear hazards are excluded from homeowners insurance due to their unpredictable and widespread potential for destruction.

Maintenance Issues and Gradual Damage

Homeowners insurance covers sudden and accidental damage, not issues that arise from a lack of maintenance, gradual deterioration, or neglect. Damage from normal wear and tear, such as an aging roof that leaks or gradual fading of materials, is not covered. Insurers expect homeowners to perform routine upkeep to prevent such problems, and failure to do so can lead to a denial of claims.

Mold and fungus damage is excluded unless it results from a sudden and accidental covered peril, like a burst pipe or a specific storm event. Mold that develops from long-term dampness, high humidity, or chronic leaks is excluded. This distinction emphasizes the homeowner’s responsibility to address moisture issues promptly to prevent extensive mold growth.

Damage from pest infestations, including insects like termites or rodents, is excluded from standard policies. These issues are preventable with regular inspections and pest control measures. If a pest infestation leads to a covered peril, such as rodents gnawing through electrical wires and causing a fire, the fire damage might be covered, but the cost of pest removal and the initial pest damage would not be.

Foundation issues, such as settling, cracking, or gradual earth movement, are excluded. These problems are considered structural defects or gradual deterioration. Costs to bring a property up to current building codes after a covered loss are not included, unless “ordinance or law” coverage or an endorsement is added. This coverage is valuable for older homes, as rebuilding to modern standards can increase costs.

Specific Property and Liability Exclusions

Homeowners insurance policies have specific limitations and exclusions for certain property and liability situations. Motorized vehicles, including cars, motorcycles, and other similar vehicles, are excluded from homeowners insurance. Damage to these items is covered by separate auto insurance policies, which handle specialized vehicle risks.

Property used for business purposes within the home, or liability from business operations conducted on the premises, is excluded from a standard homeowners policy. Individuals operating a home-based business need separate commercial insurance or a business endorsement to cover business-related property, equipment, and potential liability claims. This helps segregate personal and commercial risks.

Intentional acts that cause damage or injury by the policyholder or a resident family member are excluded from coverage. Insurance covers accidental and unforeseen events, not deliberate acts of harm or destruction.

Homes left vacant for an extended period, often defined as 30 to 60 consecutive days, may lose certain coverages or have reduced protection. Vacant homes are considered higher risk for perils like vandalism, theft, or undetected damage from burst pipes, as no one is present to monitor the property. Homeowners should inform their insurer if a property will be vacant to discuss options, such as a vacant home insurance policy or endorsement.

While personal belongings are covered, high-value items such as jewelry, furs, fine art, collectibles, and cash often have specific sub-limits of coverage under a standard policy. For example, theft coverage for jewelry might be capped at $1,000 to $2,000, which is often much lower than the actual value. To protect these valuable possessions, homeowners need to schedule them individually on their policy with an endorsement or purchase a separate personal articles policy.

Liability coverage for certain dog breeds considered high-risk by insurers may be excluded or limited under a standard homeowners policy. Some insurance companies maintain lists of breeds they deem more prone to biting or causing injury, which can impact a homeowner’s ability to obtain liability coverage for incidents involving those animals. Homeowners should verify their policy’s stance on pet liability, especially if they own a breed subject to such exclusions.