Did you know? Your Home Insurance Doesn’t Cover…

While homeowners insurance covers a variety of perils and protects your home and personal possessions, it does come with a number of exclusions and coverage gaps that can result in you having to cover the cost of certain damage out of pocket. 

Let’s have a quick look at what your homeowners policy does and doesn’t cover in most situations. 

What does home insurance cover?

Most standard homeowner policies come with the following coverages:

• Dwelling: This portion of the insurance policy will pay to repair or rebuild your home and any structures that are attached to the house. This includes garages, porches and other structures that are physically attached to your home.  
• Other structures: This coverage will help pay for damage to other structures on your property that are not attached to your home. This includes things such as sheds, fences, outbuildings, detatched garages and other structures. 
• Personal property: This policy section will pay to replace your personal possessions that are destroyed by a covered peril. This includes things such as furniture, electronics, appliances, clothing, and other personal property.
• Loss of use: If your home is severely damaged or destroyed and you cannot live in it while it is being repaired, this coverage will help cover temporary living costs such as hotel bills, dry cleaning, and even restaurant costs. 
• Personal liability: Liability coverage will help cover legal and medical bills up to your coverage limits for people that are injured at your property. If you are sued due to the accident, this coverage will help cover your legal fees.  

What is excluded from homeowners insurance?

Exclusions vary by insurance company, but most standard homeowners insurance policies have common exclusions. Here are some of the most common coverage gaps in a homeowners policy:

Flood Damage: A standard homeowner policy will almost always exclude damage from floods. If you want to be protected from flood damage, you will need to purchase a separate flood insurance policy. If you home is located in a high-risk flood area your mortgage lender will require you to carry flood insurance. Flood insurance can be purchased in the private market or via the federal government’s National Flood Insurance Program.

Land movement: Homeowners insurance typically excludes damage from land movement such as landslides, sinkholes and earthquakes. You can purchase earthquake coverage and if your home is in a high-risk area, your mortgage lender will require that you carry earthquake coverage. It is also possible to purchase coverage for sinkholes and landslides if necessary. 

Are water leaks covered?

Yes, homeowners insurance will cover water damage that is caused by sudden or accidental issues such as a frozen pipe or a homeowner putting a nail into a pipe trying to hang a picture. 

However, it will not cover damage that happens due to poor maintenance by the homeowner. If a small leak occurs and you don’t get it fixed and it eventually causes massive damage, you will have to pay out of pocket

Is mold damage covered? 

In most cases, mold damage is not covered by your homeowners insurance unless it is due to a covered peril. If a pipe burst and mold grew because of the water damage it would be covered. If the mold grows due to neglect or poor home maintenance, you will have to cover the cost of repairs out of pocket. 

 Does home insurance protect valuables such as jewelry?

While it does protect items such as jewelry, art and other high value collectibles, there is typically a coverage cap of around $1,500 which means that if you have items with a value above that amount you will need to purchase an additional endorsement or rider to fully protect your valuables.