What Your Homeowners Insurance Does Not Cover and How to Fix It

You’ve worked hard to buy your home and make it your own. You want to protect it from any possible damage or loss. That’s why you have homeowners insurance, right? But do you know what your policy actually covers and what it doesn’t?

You might be surprised to learn that a standard homeowners policy does not cover some common scenarios. And if you don’t know about them, you could end up paying a lot of money out of pocket.

As a CNY insurance agency, we’ve written hundreds of homeowners policies for residents of our region over the years. In that time, we’ve encountered many policyholders who thought they were covered for perils and mishaps but weren’t.

In this article, we’ll explain what is not covered by a standard homeowners policy and how you can avoid some costly mistakes. We’ll also show you how to find the best coverage for your needs and budget.

By the end of this article, you’ll have a clear understanding of what your homeowners insurance does and doesn’t do for you and how to make sure you’re prepared for any situation.

Let’s get started!

Jump to Article Section

First, What is “Standard” Insurance?
Perils, Mishaps, and Functions That a Standard Home Policy Does Not Cover
Earthquakes and Earth Movement
Floods
Water and Sewer Backup
Act of War
Maintenance Issues
Intentional Loss
Home-Based Businesses
Power Surges
Government Action
Poor Workmanship
Powersport Vehicles
Diving Boards and Trampolines
High-Value Items
Building Ordinance or Law
Under Construction
Turn Your Knowledge Into Power By Securing Proper Homeowners Coverage

First, What is a “Standard” Homeowners Policy?

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We’ll preface this by saying not all insurance policies are the same. Some companies may have slight differences in their policies, and some policies may offer less coverage than the standard.

For the purpose of this article, we’ll define “standard” coverage as a policy that insures your home and personal belongings using replacement cost, not actual cash value.

Replacement cost coverage is what most homeowners want and what we typically advise. This means that the insurance company will pay what it takes to replace something, even if it costs more today than what you paid when you originally bought it. For more on this subject, read our overview on homeowners insurance.

Now that we’ve established standard coverage, we can begin reviewing what is not covered in a typical homeowner’s policy.

Perils, Mishaps, and Functions That a Standard Homeowners Policy Does Not Cover

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Some people believe that their standard homeowners policy covers them for any damage or loss that happens to their homes and belongings. But that’s not the case.

There are some perils and mishaps that are excluded from your policy, meaning you’ll have to pay for the repairs or replacements yourself. These exclusions are based on the principle that insurance is meant to protect you from sudden and accidental events, not predictable or preventable ones.

Below, we’ll go over some of the most common exclusions you should be aware of and how you can get additional coverage if you need it.

Earthquakes and Earth Movement

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When the earth shakes, slides, or collapses, it can cause serious damage to your home and property. Earthquakes, mudslides, and sinkholes are examples of earth movement that can happen anywhere in the country but are more common in some regions than others.

Contrary to what some believe, a standard homeowners policy doesn’t cover any damage caused by earth movement. This is because these events are considered too unpredictable and risky for insurance companies to cover. They don’t have enough data or technology to estimate the likelihood or severity of these events.

However, you can buy additional coverage for earthquakes if you want to protect yourself from this peril. Many insurance companies offer earthquake endorsements or policies that you can add to your existing homeowners policy for an extra premium. The cost of this coverage will vary depending on the insurer, your location, and the value of your home.

For instance, those of us who live in Central New York, where earthquakes are rare and mild, might pay less for earthquake coverage than folks who live in California, where earthquakes are frequent and strong.

Your agent can help you find out how much earthquake coverage would cost for your home and whether it’s worth it for you.

Floods

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Water can be a powerful and destructive force that can ruin your home and belongings. But a standard homeowners policy doesn’t cover any damage caused by flooding. You need a separate flood policy to protect yourself from this peril.

A flood is not just a lake or river overflowing its banks. According to FEMA, it can also be any situation where water covers at least two acres of land or affects at least two adjacent properties.

So, if heavy rain causes water to pool in your backyard and seep into your basement, that’s a flood. And your homeowners policy won’t pay for the repairs or replacements.

The cost of a flood policy will depend on your location, your home’s value, and your level of coverage. Generally, the farther you are from a body of water, the lower your risk and premium will be. But don’t assume that you’re safe from flooding just because you live in a dry area. Floods can happen anywhere and anytime, so it’s better to be prepared than sorry.

Your agent can help you find out if you need a flood policy and how much it would cost for your home.

Water and Sewer Backup

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Another common source of water damage not covered by a standard homeowners policy is water and sewer backup. This happens when water or sewage flows back into your home from a blocked or broken drain, pipe, or sump pump. This can cause a lot of mess and damage to your basement and belongings.

Some homeowners policies may offer a limited amount of coverage for water and sewer backup, but most require you to add it as an endorsement or buy it as a separate policy. The cost of this coverage will depend on the amount and type of coverage you choose.

You should consider how much it would cost to clean up and restore your basement if it gets flooded by water or sewer backup.

For example, if you have an unfinished basement with minimal items and a raised furnace, you may not need much coverage. But if you have a finished basement with carpeting, drywall, furniture, and appliances, you may need more coverage.

If you buy ten thousand dollars of coverage, that’s the maximum amount the insurance company will pay for your claim. You’ll have to pay the rest out of pocket if the damage exceeds that amount.

Your agent can help you determine how much water and sewer backup coverage you need and how much it would cost for your home.

Act of War

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An act of war is any violent action that happens during a war or an armed conflict. A war can be declared or undeclared, and it can involve two or more countries or groups. An armed conflict can be any situation where military forces fight each other, regardless of their origin or affiliation.

A standard homeowners policy does not cover any damage caused by an act of war. This means that if your home is damaged by a bomb, a missile, a gunshot, or any other weapon used in a war or an armed conflict, you won’t get any compensation from your insurance company.

However, the definition of an act of war can be vague and controversial. Sometimes, it can be hard to tell the difference between a war and a riot, a rebellion, or a civil disturbance.

These situations may or may not be covered by your policy, depending on your policy’s circumstances and wording. Your agent can help you understand what is and isn’t covered by your policy in case of an act of war.

Maintenance Issues

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One of the most common reasons why a homeowners claim is denied is because the damage is caused by a maintenance issue. Maintenance issues are problems that result from neglect, wear and tear, or gradual deterioration of your home and its systems. Your policy doesn’t cover these because they’re considered preventable or fixable by regular upkeep and inspection.

Here are some examples of maintenance issues that aren’t covered by your policy and how to avoid them:

• Mechanical failure – if your dishwasher or any other appliance breaks down, you’ll have to pay for the repair or replacement yourself. However, if the appliance leaks water and damages your floor or wall, that may be covered by your policy.
• Rot or mold – if you find rot or mold in your home, it means there has been moisture or water damage that hasn’t been addressed. Rot and mold can cause serious health problems and structural damage to your home. Your policy won’t cover the cost of removing or repairing rot or mold.
• Termites and other insect damage – termites, carpenter ants, and carpenter bees are insects that can eat away at the wood in your home and cause significant damage. Your policy won’t cover the cost of exterminating or repairing insect damage.
• General wear and tear – over time, everything in your home will wear out and need to be replaced. This includes things like your roof, windows, carpet, and water heater. Your policy won’t cover the cost of replacing these items due to normal wear and tear. However, if these items cause damage to your home due to a sudden or accidental event, such as a storm or fire, that may be covered by your policy.
• Smog or smoke from industry or agriculture – if you live near a factory, a farm, or any other source of pollution, you may notice that your home’s exterior gets dirty or faded over time. This is caused by smog or smoke that contains chemicals or particles that can harm your home’s paint, siding, or roof. Your policy won’t cover the cost of cleaning or repainting your home due to smog or smoke damage.

Intentional Loss

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Your homeowners policy is meant to protect you from unexpected and accidental losses, not losses you cause on purpose. If you deliberately damage your own property or someone else’s, your policy will not cover the cost of repairing or replacing it. You will also not get any liability coverage if you injure someone intentionally.

For example, if you set fire to your home to collect the insurance money, that’s arson and fraud. Your policy won’t pay for the damage, and you may face criminal charges. But if you accidentally start a fire by knocking over a candle in your kitchen, that’s an unintentional loss. Your policy may pay for the damage, depending on the cause and extent of the fire.

Similarly, if you punch someone in the face because they annoyed you at a sporting event, that’s an intentional act of violence. Medical bills or legal fees that result from your actions won’t be covered.

But if you accidentally bump into someone and they fall and get hurt, that’s an unintentional injury. Your policy may cover some expenses, depending on the situation and your liability limits.

Home-Based Businesses

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If you run a business from home, you need a separate business insurance policy to protect yourself and your customers. A standard homeowners policy doesn’t cover any losses or liabilities related to your business activities.

For instance, if you have a salon at home and a client slips and falls on your driveway, your homeowners policy won’t cover their medical bills or legal fees. You need a business liability policy to cover that risk.

Or if you make pottery at home and your kiln malfunctions and causes a fire, your homeowners policy won’t cover the damage to your home or your pottery. You need a business property policy to cover that loss.

However, there’s a difference between working from home and running a business from home. If you work from home as an employee for another company and use your home office for tasks like writing insurance articles or sending emails, that’s not considered running a business from home. You don’t need a separate business insurance policy for that.

But you should still check with your employer and your agent to make sure you have adequate coverage for your work equipment and activities.

To learn more, read our article about properly insuring a home-based business.

Power Surges

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A power surge is a sudden spike in the voltage or current of electricity that can damage your electronic devices and appliances. Your policy doesn’t cover power surges that come from outside your home, such as from a transformer malfunction or a power outage. You’ll have to pay for the repair or replacement of your TVs, computers, microwaves, and other items yourself.

However, your policy may cover power surges that come from inside your home, such as from a faulty circuit breaker or a short circuit. This is because these are considered accidental and sudden events that are beyond your control.

But check with your agent to confirm what kind of coverage you have for power surges.

Another exception is if lightning strikes your home and causes a power surge. Lightning is a covered peril under most policies, so you may get some compensation for the damage to your electronics.

But you should also take precautions to prevent or minimize the damage from power surges. Be sure to use surge protectors for your devices and appliances and check if they’re properly installed.

Government Action

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Sometimes, the government may take or damage your property for public purposes or safety reasons. This is called eminent domain, and it’s not covered by your policy. You’ll have to seek compensation from the government itself, which may not be easy or fair.

To paint a scenario, if the government decides to build a highway or a bridge on your land, they can take it from you without your consent. They’re supposed to pay you the fair market value of your property, but you may disagree with their valuation or their decision.

Know that your policy won’t help you in this situation.

Another example is if the police have a warrant to search your home and they break down your door or damage your furniture in the process. Similar to eminent domain, this is called police power.

They’re allowed to do this if they have probable cause or reasonable suspicion that you committed a crime. Your policy won’t cover the cost of repairing or replacing your property.

Poor Workmanship

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If you hire a contractor to do some work on your home, such as building a deck, installing windows, or painting walls, you expect them to do a good job.

But what if they do a poor job that causes damage to your home or fails to meet your expectations? What if they build a shoddy deck that collapses? Your policy won’t cover this type of loss. You’ll have to sue the contractor to get your money back.

Say you hire a contractor to install windows, and they do it incorrectly, leaving gaps or cracks that let water in. If the water causes mold or rot in your walls or floors, your policy won’t pay for it. You’ll have to go after the contractor for compensation.

Powersport Vehicles

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Powersport vehicles are vehicles that are used for recreational purposes on land or water here in CNY, such as ATVs, snowmobiles, motorcycles, scooters, Jet Skis, and WaveRunners. These vehicles are fun and exciting, but they’re also risky and expensive.

Your policy doesn’t cover these vehicles unless you add them as an endorsement or buy a separate policy for them.

Let’s say you own a snowmobile and store it in your garage. Your policy won’t cover it if it gets stolen or damaged by fire. You need a snowmobile insurance policy to protect it from these perils.

Or if you own a Jet Ski and use it on a lake, your policy won’t cover it if it gets damaged by another boat or by hitting a rock. You need a personal watercraft insurance policy to protect it from these perils.

Consider getting additional coverage for any powersport vehicle you own. These vehicles can cost thousands of dollars to buy and repair, and they can also cause injuries or property damage to others. You don’t want to be left without protection in case of an accident or a loss.

Diving Boards and Trampolines

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Diving boards and trampolines are fun and entertaining features that you may feel enhance your backyard pool or lawn. But they’re also dangerous and liable features that can increase your risk of injury or lawsuit.

Your policy may not cover these features unless you disclose them to your agent and pay an extra premium for them.

Some insurers may refuse to insure you at all if you have a diving board or a trampoline on your property. They consider them too risky and prone to accidents.

Others may limit the amount of coverage or increase the deductible for these features. They may also require you to follow certain safety measures, such as installing a fence, a net, or a pad around them.

If you have a diving board or a trampoline on your property, you should check with your agent to see if your policy covers them and what conditions apply.

High-Value Items

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You probably have some items in your home that are worth more than others, such as paintings, furs, jewelry, or musical instruments. Your policy covers these items, but only up to a certain limit. This limit may not be enough to replace them if they’re damaged or stolen.

• A Picasso painting on your wall may only be covered by your home policy for a few thousand dollars, even if it’s worth millions.
• If you have a fur coat in your closet, your policy may only cover it for a fraction of its value.
• The same is true for the Steinway piano in your family room, which your policy may only cover for the cost of a regular piano.
• As to the diamond ring that belonged to your grandmother, your policy may only cover it for the cost of a simple gold band.

If you have any high-value items like these, you should get them appraised by a reputable source and provide the appraisal to your insurance company. You can then buy additional coverage for these items by adding them to your policy as endorsements or riders.

This is called “scheduling the item,” and it means that you specify the item and its value on your policy.

We cover this topic in more detail in our article Scheduled Personal Property Coverage: Insuring Your Most Valuable Things.

Building Ordinance or Law

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Building codes are rules and standards that regulate how buildings are constructed and maintained. They’re designed to ensure safety, quality, and efficiency. And these building codes change over time as new materials, technologies, and regulations are introduced.

If your home is damaged by a covered peril and needs to be repaired or rebuilt, you may have to comply with the current building codes in your area. This may mean you have to upgrade some aspects of your home, such as the electrical system, the plumbing system, or the insulation. This may increase the cost of the repairs or reconstruction.

Your policy may not cover the extra cost of complying with the building codes, or it may only cover a limited amount. The rest of the cost will be your responsibility. Some insurance companies allow you to buy more coverage for this category by adding an endorsement or rider to your policy.

This is usually not very expensive because this situation doesn’t happen very often. But you should be aware of this potential issue and check with your agent to see how much coverage you have for building ordinance or law.

Under Construction

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If you’re planning to remodel or renovate your home, you should be aware that your policy may not cover any damage that occurs during the construction process. This is because construction projects involve risks and uncertainties that are not covered by a standard homeowners policy.

So, imagine you’re excited about your upcoming renovation that will remove the wall between the kitchen and the dining room. You think this will make your kitchen more spacious and bright. But when the contractor finally removed the wall, workers quickly discovered it was a supporting wall that held up the second floor.

The next thing you know, your bathtub crashes down into your kitchen, causing a huge mess and damage.

Your policy won’t cover this type of damage, because it was caused by a construction error or defect. You’ll have to rely on the contractor or the architect to fix the problem and pay for the repairs. That’s why it’s very important to check the credentials and insurance of any contractor or professional you hire for your construction project.

You should ask them to show you proof of their liability and workers compensation insurance before they start working on your home. This way, you can protect yourself from any potential lawsuits or claims that may arise from the construction project.

Turn Your Knowledge Into Power By Securing Proper Homeowners Coverage

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You don’t want to be caught off guard by a loss or damage that isn’t covered by your standard homeowners policy. You want to protect your home and belongings from any possible peril or mishap. You want to avoid paying out of pocket for repairs or replacements that could cost you thousands of dollars.

And you want to have peace of mind and confidence that you have the best coverage for your needs and budget.

As an agency that has spent years writing various home policies, we can help you review your current policy and identify any gaps or exclusions that may expose you to risk.

We can help you find the best coverage for your high-value items, your home-based business, your powersport vehicles, and more. We can help you add endorsements or riders to your policy that will cover you for water and sewer backup, building ordinance or law, and more.

Don’t wait until it’s too late. Call 315-635-2035 today and let us help you secure your home and your future. We’ll show you how to avoid failure and achieve success with your homeowners insurance.

We’ll make sure you have the coverage you need and deserve.

You can also click the Get a Quote button below to get started, and one of our friendly agents with reach out with the next steps.