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December 11, 2017

What Home Insurance Doesn’t Cover

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What Home Insurance Doesn’t Cover

A home insurance policy won’t cover every thing that could possibly go wrong with a home. The details are all in the fine print within the policy.

“Insurance policies are like snowflakes; no two are exactly the same,” Ashleigh Cloud Trent, an insurance adviser with Swingle Collins and Associates in Dallas, told realtor.com®.

Many standard policies do not include a few things that homeowners may assume they cover. Homeowners may need to investigate supplemental coverage. Here are a few common things that aren’t covered by homeowners insurance:

Home renovations

Homeowners will need to take out a specific renovation policy if they’re doing major work to their home. A renovation policy will cover potential liability issues, such as if someone gets hurt on your property during the remodel. “It’s OK if you’re just doing cosmetic updates; but if you’re taking the roof off, that’s more than a standard homeowners policy is designed to protect,” says Trent.

Earthquakes and floods

Homeowners will need to get earthquake insurance if they want to be protected. Standard homeowner coverage isn’t usually protective from damage in earthquakes, leaving you paying for repairs. Floods aren’t often covered in standard insurance policies either and require supplemental insurance.

Slow water leaks

Damage from “seepage and leakage” can also be denied for coverage. Water damage usually has to be “sudden and accidental” to be covered, Trent says. Trent offers up one example: A client whose contractor nicked a pipe behind a wall. The pipe was connected to a seldom-used guest bathroom, so nobody noticed the leak. When they rented out the home years later, the tenants called a few months later to report that the floorboards were warping. The damage was $25,000, and the homeowners insurance wouldn’t pay any of it.

Smell damage

Most policies won’t cover smells that linger around your home and possessions. We had a client in the process of renovating a home who put all of their belongings in a storage unit that happened to be right next to a restaurant, says Trent. When he went to get his things back, all his possessions, including his mattress, permanently smelled like curry.

Sewer and drain backups

Homeowners may also be stuck with the bill if their sewer backs up into their home. In a lot of places, when there’s serious rain, the sewers and drains can back up into people’s homes, says Trent. Not all policies will cover that.

View more problems that standard homeowner insurance policies don’t typically cover at realtor.com®.

Source: “9 Things Typical Homeowner Insurance Doesn’t Actually Cover,” realtor.com® (Oct. 26, 2017)