7 Things Your Homeowners Insurance Likely Doesn't Cover
By Kristin Wong
Insurance is one of the only things you buy with the hope that you’ll never have to actually use it. But should the unexpected happen, you want to make sure you know what's covered under your plan. Here are some of the surprising expenses your standard homeowners insurance policy doesn’t always cover.
1. SOME NATURAL DISASTERS
Your homeowners insurance does cover damage due to some natural disasters, like tornadoes or lightning strikes. But others—earthquakes, for instance—are a different story. As the Insurance Information Institute points out, earthquake coverage must be purchased as a separately policy or as an add-on to your standard policy, either through your insurance company or a third-party vendor.
“You may also need flood insurance for your home,” Donna Childs, author of Prepare for the Worst, Plan for the Best, tells mental_floss. “That is purchased separately.”
You can buy flood insurance from private insurance carriers or from the National Flood Insurance Program. In some designated flood zones, this insurance is actually a requirement.
2. MOLD INFESTATIONS
Your homeowners insurance doesn’t always cover mold, and that’s because mold typically grows due to lack of maintenance. And if your policy doesn’t completely exclude a mold infestation, it probably at least limits your coverage. According to Zillow, “Most policies include certain mold exclusions. Many standard policies won’t offer coverage for mold that arises from poor maintenance, chronic or repeated water leaks, or failure to properly ventilate rooms.”
For this reason, prevention is key. If your pipes have any leaks, for example, you’ll want to have them fixed immediately to keep any potential mold at bay.
3. TERMITE DAMAGE
Termites can cause serious damage to your home, and that damage isn’t always covered. Again, this is because standard homeowners policies only cover “perils that are sudden and accidental,” as Allstate puts it, and termites and other pests are usually considered preventable.
It pays to periodically hire a termite inspector. Most experts suggest an inspection every couple of years so you can catch the critters early, saving thousands of dollars on potential repairs.
4. YOUR HOME BUSINESS
Here’s one to keep in mind if you work from home: Your standard homeowners policy won’t cover your business losses.
“If you have a home-based business, or if you have a home office where you occasionally work from home, your homeowners insurance will typically cover a few thousands dollars’ worth of property, such as your desk and office furniture,” says Childs, “But it won’t cover business interruption—revenues your business lost because of a disaster—or liability risks, so you need to have appropriate commercial coverage for these risks.”
This means, if you have an inventory of products you sell for your business, your policy probably won’t cover those items, either. Most small business owners need a separate business policy to cover business-related items and liability.
5. SEWER BACKUPS
A sewer backup is a nightmare, and to make matters worse, most standard policies don’t cover them because they're preventable with proper upkeep. You can, however, purchase this coverage separately for about $40 to $50 extra a year.
If the damage from your sewer backup is so extensive that you are forced to temporarily relocate, the Insurance Information Institute says your standard policy might cover your short-term living expenses under its Loss of Use coverage.
6. BURST PIPES DUE TO NEGLIGENCE
Burst pipes are usually covered, but not always. If your insurance company assesses the damage and determines it was due to negligence, they may not want to pay up. If your pipes had a minor leak, for example, and you procrastinated fixing it, your carrier may consider that to be lack of maintenance. And in that case, your policy won’t fly. For this reason, it’s important to take proper care of your pipes, and that means preventing them from freezing in the winter and making sure they’re protected when you travel.
7. SOME POOL, TRAMPOLINE, OR TREEHOUSE HAZARDS
If someone is injured in your home, your standard insurance policy will typically cover the medical costs. However, some policies specifically exclude injuries from "high risk" structures like trampolines or treehouses. And while most pool injuries are covered, some policies will nullify that coverage if you have a diving board installed.
Just like any other insurance policy, you want to read your explanation of benefits thoroughly so you understand your coverage and you’re not caught off-guard. Childs offers some additional advice: “Be sure to budget to cover your deductible in the event you have to file a claim. Photograph or videotape key items, like artwork and jewelry, and have paperwork to substantiate the replacement costs to help file a claim.”