What Is Not Protected by Most Homeowners Insurance?

Homeowners insurance serves as a financial safeguard for your dwelling and possessions against a range of unforeseen events. While these policies offer broad protection, they do not encompass every potential scenario or type of damage. Understanding the specific exclusions within a standard homeowners policy is important for policyholders to identify potential gaps in coverage and consider whether additional protection is necessary.

Perils Most Homeowners Policies Do Not Cover

Standard homeowners insurance policies exclude damage from certain catastrophic natural disasters and issues stemming from long-term neglect. Flooding is a prime example, as damage caused by natural floods, heavy rain, sewer line backups, sump pump overflows, or water seeping from the ground is not covered. This exclusion exists because flooding is considered a high-risk, widespread event, often requiring a separate flood insurance policy, available through programs like the National Flood Insurance Program (NFIP) or private insurers.

Earthquakes and other earth movements, such as landslides, mudslides, or sinkholes, are also excluded from standard policies due to their potential for widespread and expensive damage. While some states may require insurers to offer optional sinkhole protection, separate earthquake insurance or an endorsement is needed for coverage against these geological events.

Mold, fungus, and rot are excluded, especially if they result from long-term issues like neglected leaks or poor maintenance. However, if mold growth is a direct result of a sudden and accidental covered peril, such as a burst pipe, there may have limited coverage. Similarly, pest infestations from termites, rodents, or other vermin are not covered, as they are considered preventable through routine home maintenance.

Damage resulting from nuclear hazards, war (declared or undeclared), or governmental action is excluded from homeowners policies. These events are considered uninsurable due to their catastrophic and widespread nature. Damage arising from neglect or poor maintenance, such as roof leaks from lack of repair or burst pipes due to an unheated home in winter, is also excluded, as insurers expect homeowners to maintain their property. This distinction is based on whether the damage is sudden and accidental versus gradual deterioration that could have been prevented.

Property Types with Limited or No Coverage

While homeowners insurance protects your dwelling and personal belongings, specific types of property have limited or no coverage under a standard policy. High-value items, such as jewelry, furs, fine art, collectibles, and silverware, have sub-limits, meaning the policy will only pay a small, specified amount for their loss, around $1,000 to $2,500 for theft of jewelry, regardless of actual value. To adequately protect these items, policyholders need to purchase a scheduled personal property endorsement, which lists individual items and insures them for their appraised value, covering risks not included in a standard policy like accidental loss or mysterious disappearance.

Detached structures on your property, like sheds, detached garages, fences, or gazebos, are covered, but their coverage is limited to a percentage of your dwelling coverage, around 10% to 20%. For example, if your home is insured for $300,000, your detached structures might only be covered up to $30,000. If these structures are high-value or used for business, the standard limit may be insufficient, necessitating an increase in coverage or a separate policy.

The land itself on which your home sits is not insured by a homeowners policy; only the physical structure of the dwelling is covered. Motor vehicles, even if damaged while on your property, are excluded from homeowners insurance and are covered by auto insurance policies. Business property, particularly items used for a home-based business, has very limited coverage, around $2,500, under a standard policy. This necessitates separate business insurance to adequately protect business assets and liabilities. Animals, including pets like dogs, cats, birds, or fish, are not considered personal property for insurance purposes and are not covered for damage or loss.

Situations and Damages Not Covered by Standard Policies

Beyond specific perils and property types, certain situations or actions by the insured can lead to claims being denied or are explicitly excluded. Intentional damage or acts committed by the insured or a resident family member, such as arson or deliberate vandalism, are not covered. Insurance policies are designed to cover accidental and unforeseen events, not deliberate destruction.

Homes that are vacant or unoccupied for an extended period, beyond a specified timeframe like 30 or 60 days, may have limited or no coverage. A vacant home means it is empty of both people and personal property, while unoccupied means people are absent but property remains. Insurers view these properties as higher risk for vandalism, theft, or undetected damage.

Damage from wear and tear, deterioration, or latent defects is excluded. This applies to gradual damage that occurs over time due to normal use or aging, rather than sudden, accidental events. For instance, a roof leaking due to age and not a storm would not be covered. Policies also do not cover increased costs due to ordinance or law changes, such as the expense of bringing a damaged home up to current building codes during repairs, unless a specific endorsement is added. Finally, government-mandated demolition or condemnation of a property is also not covered by standard homeowners insurance.