In general, standard homeowners insurance doesn't protect against damage to your home that isn't sudden and accidental. For example, if you have wood rot in the walls that's taken months to occur, the damage will not be covered. Similarly, damage due to poor maintenance and old age aren't covered either.
Specific sources of damage are often excluded from a homeowners insurance policy as well. For instance, if a flood damages your home, standard homeowners insurance would not cover it. This also goes for pests and problems under your foundation.
Knowing what isn't covered by your home insurance policy is important in order to avoid filing claims that won't be covered right out of the gate. Not only will your claim be denied if a problem is excluded from your policy, but it will probably also result in a premium increase at your policy renewal time.
This article will cover:
The two types of home insurance policies and what they exclude
What a homeowners insurance policy does not cover starts with what type of policy it is — open peril or named peril:
Open peril: An open peril policy covers any event unless it's specifically excluded from the policy. Most standard home insurance policies, also known as HO-3 policies, are open peril.
Named peril: Named peril policies can be considered the opposite of open peril policies. Named peril policies only cover events explicitly noted in the policy. If you don't see the problem listed in your policy, it's not covered.
Homeowners insurance general exclusions
There are certain conditions that standard home insurance excludes, even if the item or structure in question is usually covered. These situations include:
- Wear and tear: Homeowners insurance only covers sudden and accidental damage. If your water heater breaks down due to old age, for example, it won't be covered.
- Negligent home care: Your home insurance company assumes that you properly take care of your house to avoid problems. If damage to a covered system or appliance could have been avoided with typical home maintenance, it will be excluded.
- Poor installation: Improperly installed structures, systems and appliances in your home are usually not covered by home insurance. This is because it can be difficult to pinpoint the actual cause of the damage. For example, if a windstorm damages a roof with shingles that weren't installed properly, the damage may be due to the wind, or it could be due to the shingles being weak in the first place. Your insurer won't cover damage that could have been prevented.
Specific perils that are not covered by home insurance
There are many specific events that may not be covered by your home insurance. Many of these perils, such as floods or earthquakes, are not included as areas of coverage, but have supplemental coverage options that you can purchase. These areas of home insurance exclusions include:
Home insurance does not cover the repair or replacement of burst pipes, only the water damage that occurs due to the burst pipe.
Other water systems
Sewer line backups and sump pumps are not covered. Some home insurance providers sell optional coverage for either sump pumps or sewer lines.
Mold and rot
Mold and rot are tricky in terms of home insurance coverage. On one hand, both mold and wood rot take a long time to develop, which contradicts the "sudden and accidental" criteria for damage covered by home insurance. If mold or rot occurs due to not taking care of home maintenance, it will not be covered.
However, if mold or rot develops due to a covered peril, it may be covered. For example, if a rainstorm punches a hole in your roof and rainwater leaks in and causes mold or rot, your claim should be valid.
Much like flooding, earthquakes and landslides are not covered by an HO-3 home insurance policy. Both types of earth movements can cause significant damage. If they were covered under standard home insurance, the average policy premium would be cost-prohibitive. But some insurance providers offer optional policies for earthquakes and landslides.
Sinkholes are not covered by standard home insurance either, partly due to the incredibly high repair costs of sinkhole damage. The average payout on a sinkhole claim is $140,000, which would make home insurance unaffordable if sinkholes were a standard covered peril. Since sinkholes only occur in relatively few areas of the country, the necessity of covering them is fairly conditional.
But Florida and Tennessee are exceptions to this. Florida has the highest level of sinkholes in the country. Home insurance providers in the state must offer optional coverage for sinkholes. This also raises the average home insurance premium in Florida to $1,777 a year, well above the average national home insurance cost of $1,215 annually. Tennessee home insurance providers are required to offer optional sinkhole coverage as well.
Flood damage, both to the structure of your home and personal property, is not covered by a standard home insurance policy. Flood insurance can be purchased separately through FEMA's National Flood Insurance Program (NFIP). Depending on the flood zone you live in, your mortgage lender may require you to have flood insurance.
It may seem odd, but water damage from a hurricane wouldn't be covered by standard home insurance, but wind damage would be. This is because standard home insurance providers consider this type of water damage to fall under flooding, which isn't covered under a standard policy. In order to get full coverage for hurricane damage, add flood insurance to your policy.
Damage due to pests is usually excluded from standard home insurance. Damage to your home caused by termites, bedbugs, rodents and other vermin takes a while to manifest, and is considered preventable with proper home maintenance, so home insurance providers don't cover it. However, if a covered peril occurs due to pests, like rats chewing on wiring and causing an electrical fire, the fire damage may be covered.
HO-3 home insurance policies don't usually cover any damage that occurs under the slab of your house. Damage that happens or originates underneath the foundation of your home is usually not covered.
Certain breeds of dogs
Some home insurers exclude certain dog breeds from your home insurance policy's liability coverage. This is due to the theory that some breeds have a higher bite risk than others. These excluded breeds may vary among companies, so make sure to check with the home insurer you're interested in getting a policy from before you buy.
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