Knowing what your homeowners policy won't cover will prevent unpleasant surprises in the event of an accident or disaster. Coverage restrictions vary by area, insurer and policy type. Your policy will list specific exemptions from coverage, but there are some common events and situations homeowners insurance usually won't cover.
Flooding isn't covered as a natural peril by a basic homeowners policy. You need to purchase separate coverage through the National Flood Insurance Program, provided by the federal government. The government started the program in 1968 to help renters, homeowners and business owners in flood-prone areas get coverage. Rates vary by area, depending on the flood risk, and by housing type.
Pest infestations, such as rodents and bugs, can cause serious damage to a home. Termites, for instance, may damage the wooden framing and burrow inside walls, eating your home from the inside out. Homeowners insurance won't cover anything directly related to a pest infestation, including removal and repair. However, sudden events indirectly caused by the infestation, such as the damage caused by a fallen termite-ridden beam, might be.
Building Code Compliance
Your home is insured as is. If you need to upgrade to meet building codes, your standard policy won't cover the cost associated with the upgrade. Your insurer may offer an optional coverage rider that covers part of the upgrade costs, but it only kicks in after a home has suffered a disaster.
A traditional homeowners policy doesn't cover damage from earthquakes. You may be able to buy earthquake coverage from your home insurer for an additional premium. Rates vary by area risk and coverage levels.
Your homeowner's policy won't cover accidents, losses or damage related to a small business you're running from your home. For example, if someone slips and falls on your home's porch while delivering a package for your business, your liability coverage won't apply. You may buy some limited coverage for your business as part of your homeowners policy if your insurer offers it or get a separate policy. The right course of action depends on your particular situation. If you're working from home for an employer, for instance, you may need less coverage than if you're running the business alone.
- National Flood Insurance Program: Overview
- Realtor: Five Signs Your Home May Be Infested with Termites
- Insure: Home Insurance Exclusions -- What Your Policy Won't Cover
- Bankrate: There Is No Insurance Against Household Pests
- USAA: What Homeowners Insurance Doesn't Cover
- Bankrate: Working at Home? Get Home Business Insurance
Anna Assad began writing professionally in 1999 and has published several legal articles for various websites. She has an extensive real estate and criminal legal background. She also tutored in English for nearly eight years, attended Buffalo State College for paralegal studies and accounting, and minored in English literature, receiving a Bachelor of Arts.