Homeowners insurance provides broad coverage for the home and its occupants. It protects the house itself, appurtenant structures serving the house, and contents. It provides personal liability as well, one of its most valuable coverages, protecting against responsibility for injuring someone or damaging the property of others, including legal fees. However, homeowners insurance doesn’t cover everything. Let’s look at common situations where protection is not provided. Keep in mind that in many cases coverage can be expanded for an additional fee for areas of concern, or a separate policy may be purchased.
The list below is incomplete, and insurance policies vary. Here we address how common policies address these situations, and yours may be different. Reference your policy or ask your insurance agent regarding any uncertainties.
Deductibles
Nothing like stating the obvious first! Deductibles, by definition, are the client’s upfront share of a claim. They are clearly stated in each policy and apply to damage to the home and contents. However, deductibles do not apply to liability. Policies can also contain several deductibles applying in different situations.
Claim Amounts Above Policy Limits
If a home is insured for $100,000, amounts above that will not be paid by the insurance company. Insuring the home to its full replacement cost is a requirement of insurance, thus co-insurance penalties can be imposed for under-insured property. Guaranteed replacement cost is one exception, but not available on all policies.
Reference The Need to Insure Your Home at Full Replacement Cost and How to Value Your Home
Normal Wear and Tear
Just like tires on a vehicle, parts of a home wear out as well. This includes flooring, paint, and roofing. Roofs have a finite lifespan, and periodically require replacement. Insurance companies require the homeowner perform required maintenance. Thus, unless weather or similar event causes the damage, worn out roofs are not covered.
Reference Truth About Roof Insurance Claims
Continuous Issue
Like normal wear and tear, claims for damaged caused over time are at risk of being denied. This is because such claims represent maintenance issues. Had the problem been resolved originally, damage would not have occurred. For example, if a water pipe beneath a sink exhibits a slow leak that eventually damages the kitchen floors, that claim may be denied because the homeowner failed to perform proper maintenance – they didn’t fix the leak when they had the opportunity. However, if the same pipe suddenly bursts and causes damage, that is likely covered.
Flood
Under the definition of insurance, a flood is a sudden inundation of water upon normally dry ground. This can be a large-scale event such as a body of water overflowing due to rain, or a local event that only affects a couple homes. Flood insurance can be added to certain policies, or a separate policy purchased.
Reference Flood Insurance
Water Backup
Water backups occur when sewer lines become clogged due to tree roots or other issues. If connected to a municipality sewer system, a backup in one area can cause issues elsewhere. However, most home insurance policies can include water backup and even service line protection for an extra fee.
Reference Extra Home Insurance Coverages
Dog and Pet Damage
If an owner’s dog chews through their own home’s drywall or breaks through a fence, such repairs will not be covered. Damage caused by other pets is similarly at risk.
Reference How Dogs Affect Homeowners Insurance
Ordinance or Law Expenses
Additional repair expenses due to local laws and ordinances are not covered, or are limited in coverage. These ordinances may require the home be built back in accordance with newer, updated specifications and building codes which cost more than the original building methods. Standard homeowners insurance policies allow 10% of the coverage to be spent on these expenses, but that can be increased if needed.
Reference Extra Home Insurance Coverages
Collections
Collections of fine arts, antiques, or other costly items are provided limited protection.
Reference Common Home Insurance Riders
Tree Removal
If a tree comes down on the house, homeowners insurance will pay to have it removed. However, it will not pay to remove downed trees on the property that do not damage the home or another covered structure. Certain policies may contain limited amounts of coverage for this purpose.
Reference Frequently Asked Questions
Other Property Exclusions
- Frozen pipes, if heat is not properly maintained.
- Mold, fungus, or rot
- Personal cyber-attacks and identity theft. Coverage is often available for an additional fee.
- Damage caused by a power failure. Special coverages can be purchased for food spoilage.
- Equipment breakdown such as heating and air conditioning, washer, dryer, refrigerator, freezer, stove, hot water heater, home security systems.
- Damage due to neglect of the home. Each homeowner must maintain their house in proper working condition.
- Smog, rust, or corrosion
- Nesting or infestation of animals (termites and other).
- Earthquake and Sinkhole
- Pollution and pollution cleanup
- War
- Nuclear hazards
Liability Exclusions
The personal liability protection provided by homeowners insurance contains limitations and exclusions as well. The most common include:
- Liability due to the use of cars, watercraft, and aircraft
- Liability due to expected or intended bodily injury or property damage
- Business liability
Several other common homeowners issues and exclusions are addressed in our Frequently Asked Questions.
Further questions on home insurance? Contact your Bankers Insurance agent. We will help determine your risks and advise how to best cover them. Not a client of ours? Let us earn your business! Each of our clients is assigned a personal insurance agent and provided their email address as well as a phone number that rings right on their desk.
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