What Does Homeowners Insurance Not Cover?

Homeowners insurance coverage is a fact of life when you own property, especially if you have a mortgage. Typical homeowners insurance policies cover you from over a dozen forms of potential damage.

But, it’s important to completely understand your policy, so you know what is not covered by homeowners insurance. This way, you can look for other types of insurance to fully protect your property and your livelihood. So, let’s see which area is not protected by homeowners insurance.

When you’re thinking about what is not protected by most homeowners insurance, perhaps one of the biggest and most costly exclusions from your policy is flood damage.

While leaks and water damage that originate inside the home are typically covered by your home insurance policy, water damage from outside the home isn’t. This includes damage from rain, floods, storm surges, and king tide if they’re unaccompanied by another covered peril.

Depending on where you live, your mortgage lender may require you to get a flood insurance policy on your home. You can get flood insurance through the National Flood Insurance Programs (NFIP) or a private insurer. Even if flood coverage isn’t mandatory in your area, you may want to consider picking up a policy anyway.

Floods don’t just happen in coastal regions, and any unexpected storm can lead to costly flood damage. Plus, they’re the most common natural disaster on earth and one of the most commonly filed home insurance claims each year.

As mentioned, water damage from a burst or broken pipe is likely covered under your policy. But, your homeowners insurance won’t cover broken pipes or plumbing in every situation.

If your pipes or plumbing units are damaged as a result of negligence or lack of upkeep, replacing them may be left up to the homeowner. This can include frozen pipes, when the water hasn’t been properly drained before the winter months, or if they’re missing insulation. If you live in a more frigid climate, keeping your pipes warm and free from damage is often considered the homeowners responsibility.

Also, if you notice a leaking pipe, but decide not to file a claim until it’s caused enough damage to need repairs, you won’t be covered. Gradual damage that could’ve been prevented or mitigated somehow by the policyholders’ actions won’t receive coverage.

This would be considered negligence on your part – you could’ve done something to prevent the damage from getting worse. In this instance, your insurer won’t cover pipe replacement.

If you work out of your home, you may need a separate business insurance policy to protect your equipment, product, and office space. While traditional homeowners insurance coverage may include up to $2,500 for at-home work equipment (including computers and printers), that may not be sufficient to replace all of your work furnishings in the event of a disaster.

This is especially true if you keep inventory or heavy equipment at your home. Or, if you have a detached garage or shed dedicated to your work, the structure alone is probably worth more than $2,500, and it might not be covered under your home insurance since it’s a place of business.

Additionally, you may want to consider some common business insurance policies for the added liability coverage in case you have to deal with a lawsuit against your business. This is essential if you have customers that visit your house.

For many people, pets are like family. To your insurance company, they may be considered more of a liability. If your pet happens to be considered an “aggressive” breed by the insurance company or they’re not properly added to your policy, a canine attack might not be covered.

If your pet is excluded from your homeowners insurance coverage, the damage they do to a neighbor or guest would be your obligation to cover. Additionally, damage caused by your pet to your property isn’t covered. Some breeds that may raise red flags to your insurer include:

Like broken pipes, the issue of mold might depend on whether or not the insurance company considered the homeowner negligent for allowing it to occur in the first place. 

Mold isn’t just disgusting, it can be dangerous to your and your family. Eradicating mold from your home can cost thousands of dollars in worst-case scenarios, and many traditional insurance policies exclude mold under most circumstances.

You might still be protected if the mold is a result of flooding due to a burst pipe, or flood due to weather with separate flood insurance. However, if the insurance company finds you negligent or potentially responsible for the mold, they may choose to deny the claim altogether.

Typical home insurance policies exclude “earth movements” from coverage. This includes earthquakes, sinkholes, landslides, tremors, and other erosion. If your property or belongings are damaged as a result of these, they won’t be covered.

Instead, it’s important to recognize if your home is at risk for these kinds of damages so you can invest in separate, specific policies that cover them. You can invest in earthquake or volcano coverage, for instance.

In Florida, you receive limited coverage from extreme sinkhole damage by law under your home insurance policy. But, this may not be enough for you to feel comfortable. Instances of minor sinkhole damage are still excluded.

If you’re having work done on your home, it’s important to make sure you’ve hired contractors with adequate insurance and valid warranty service. If something goes wrong while contractors are working – whether they’re upgrading the cabinets or knocking out a wall – that damage is typically excluded from a home insurance claim. 

Even if you discover an issue while or after you’re making repairs yourself, you likely aren’t covered, either. Many home insurance plans exclude damage from “faulty, inadequate, or defective” workmanship, which can include mistakes in design, specifications, workmanship, repair, construction, renovation, remodeling, grading, or compaction

When you’re researching companies for remodeling your property, always check for liability coverage and even ask about a builder’s risk policy.

It’s common for homeowners to request validation of insurance coverage to guarantee the construction team in your home is protected with adequate coverage. Your insurance doesn’t want to be responsible for the actions of contractors or builders who aren’t the policyholders, or mistakes that you make when trying DIY home improvements.