While we would all love to think that our home insurance policy covers anything that could possibly ever happen to our home, the truth is that there are several things that are NOT covered by typical home insurance policies. Some of these things can be covered when added by endorsement, and then there are other things that home insurance just wasn’t designed to cover.
Don’t be too alarmed, however. Most disasters that a reasonable person could imagine happening are covered by a standard home policy. These disasters that ARE generally covered include damage caused by fire, wind, lightning, hail, tornado, aircraft, and many other types of sudden and unforeseen damage.
With that said, it’s important to note that home insurance is NOT designed to take place of a good home warranty plan. Everyday wear and tear and deterioration of your home as it ages is not something covered by home insurance. Home Insurance (also referred to as “hazard insurance” by mortgage lenders) is designed to protect you should something unforeseen and unplanned (i.e. accidental) happen to your home. Damage caused by wear and tear is a maintenance issue with the home, not an insurable cause of loss. Proper upkeep and maintenance of your home can prevent these types of damages, but it’s important to remember that if you have damage to your home as a result of poor upkeep or wear and tear, it’s unlikely that your home policy will provide coverage.
Here are the most common policy exclusions:
Water Damage: Water is, hands down, the trickiest subject when it comes to insurance. Home policies come with a blanket Water Damage Exclusion. The mere presence of water does NOT trigger coverage in a homeowner policy. Now, before you get too alarmed or come back and tell me about a time when water damage was covered, I need to explain further.
The blanket exclusion for water damage in a home policy comes with a variety of exceptions to the exclusions. It is within these exceptions that actual Water Damage coverage IS found (with limitations) in your homeowner policy.
Generally speaking (in most standard Special Form policies), water damage from frozen pipes IS covered as long as heat was maintained in the building (i.e. reasonable measure taken to prevent your pipes from freezing over).
Busted appliance lines are generally covered, but usually with VERY LIMITED time restraints. In many policies you will find a time frame where hidden seepage is covered IF discovered and repaired in a reasonable time frame. This time frame is usually 7-10 days (sometimes a little longer, but potentially shorter). This means if your refrigerator line busts and you catch and repair the leak in a short time frame, coverage is likely to apply. However, if your refrigerator line busts and you ignore the leak and water seeps in to your floor boards and walls and causes significant water damage and mold, coverage is likely to NOT apply as the seepage may occur longer than the time frame when coverage can apply.
Water Backup, from Sewer & Drainage System, is also a common exclusion BUT is one that is able to be endorsed on most home policies. Absolute Integrity does recommend discussions with every homeowner regarding your water backup policy limits. Home policies start with zero coverage, but adding water backup can be an affordable endorsement that is well worth considering.
Earthquake Damage: Earthquake is one of those disasters that insurers decided to NOT charge everyone to cover, so home policies come with a giant exclusion for all damage caused by earthquakes. Not only are earthquakes not covered, but also subsequent tremors and any earth movement (even from your home settling over time).
Fortunately, if you are concerned about earthquake coverage, there are options (with most insurers) to add coverage for Earthquake. If your insurer does not offer this coverage, there are other options to add this coverage thru standalone earthquake policies.
Flood Damage: Damage from flood is another major natural disaster that is not able to be priced for on a massive scale, so it’s not built in to homeowner’s insurance policies. Flood is typically defined as water entering the home thru the outside of the home (including up thru the foundation, or in thru the windows and doors of the home).
While flood damage is excluded in homeowner policies, there are options to purchase coverage thru the National Flood Insurance Program (NFIP) as well as thru Private Flood Policies offered thru private insurers. Absolute Integrity has options for both NFIP-endorsed and Private Flood policies.
Other Exclusions: While there are other exclusions, including but not limited to damage from acts of war, terrorism, and intentional damage, most other things that you can imagine are covered by your insurance. Hail storms wreaking havoc on your roof and siding, the fire caused by an electrical malfunction, smoke damage from a small accidental kitchen grease fire, and other damages are more than likely covered.
The best word of advice that we have is that you employ the expertise of a professional insurance agent to guide you thru the process of purchasing a home insurance policy that is adequate to protect your family in the event of a disaster. Your home and family are too important to just hope that you chose the right policy and coverages from an online-only provider. A professional insurance agent, such as one who you can work with thru Absolute Integrity, can be a critical asset when it comes to securing your future.