5 Perils Not Covered by Homeowners Insurance

Homeowners insurance is an absolute necessity to protect your home and its contents. If you have a mortgage on your home, it is also required. While homeowners insurance offers plenty of protection, there are gaps in coverage that you should be aware of because they can lead to massive out of pocket costs if you are not fully covered. 

Following are five coverage gaps that every homeowner should consider:

Flood Damage: While water damage from a burst pipe is typically covered, real flooding, from a hurricane, storm surge or just a massive rainstorm is almost always excluded from a standard homeowners policy. 

The best way to make sure you are fully protected is to put a flood insurance policy in place, this is particularly important if your home is located in an area that is prone to flooding. Flood insurance can be purchased through FEMA’s National Flood Insurance Program (NFIP) or in the private market. While flood insurance tends to be fairly expensive, it can be a financial lifesaver if your home is severely damaged by floodwaters. 

If you have a mortgage on your home, your lender may require flood insurance if it is located in a high-risk area. 

Termite Other Pest Damage: Termites and other pest can cause massive damage to a home that can lead to thousands of dollars in repair costs. Recent data shows that termites alone cause roughly $5 billion in damage every year in America.  Unfortunately, in most cases, the homeowner is responsible for this type of damage. 

Insurers consider checking your home for termite and other pest damage as maintenance that should be done on a regular basis so that the damage is caught early before it becomes a major issue which is why pest damage is excluded from most homeowner policies. 

If you live in an area where termites or other pests are an issue, consider having your home inspected on an annual basis to help detect any damage early before it the costs to repair it get out of hand. 

You can take some precautions by sealing gaps and cracks in your home and inspect the foundation, windows and siding. 

Sewer Backup: While sewer backup issues are typically excluded from a homeowners policy, most insurers offer this coverage as a rider or add-on to your policy. Adding this coverage is usually very affordable, running $100-$150 a year. 

This coverage can help cover the cost of damage if your sewer backs up and causes issues within the house. In addition to adding a sewer backup rider to your policy consider installing a backwater valve which prevents sewage from flowing back into your home.

Mold Damage: Mold can grow quickly, can cause dangerous health conditions and is often very expensive to remove but in most cases, it is not covered by insurance. If the mold is caused by a burst pipe that you had fixed immediately, your insurer may cover the cost of mold removal but if the mold had grown slowly in your home and has gone unnoticed for months or years, the cost to remove it will fall to you. 

Many insurers offer a mold rider, but coverage is often capped at $10,000 which may not be enough to cover the removal cost if the damage is significant. Having leaks fixed quickly can help prevent mold growth.

Earthquakes and Ground Movement: Just like flood damage, earthquake damage is almost always excluded from homeowners insurance. Because earthquakes and the damage they cause are so unpredictable insurers exclude coverage from a standard homeowners policy. 

In order to be fully protected you will need to purchase a separate earthquake policy. If you live in an area where earthquakes are a possibility, adding an earthquake policy to your insurance portfolio is a necessity. While earthquake insurance can be expensive, covering the cost of damage out of pocket can be devasting. 

In addition to purchasing earthquake insurance consider upgrading your home to make it more earthquake resistant such as bolting home to the foundation and reinforcing cripple walls.