Which Area Is Not Protected By Most Homeowners Insurance?

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Lacey Jackson-Matsushima
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When you take out a homeowners insurance policy, you might think you can rest easily. Unfortunately, there are areas not protected by homeowners insurance, and if you don’t know which ones, you might be in for a surprise when your claim is denied.

Key Takeaways

  • Homeowners insurance does not protect several things within your home, such as business equipment and certain dog breeds

  • Different situations which can cause damage are also excluded, such as hurricanes, earth movements, and volcanos

  • You can purchase riders to provide additional coverage for individual exclusions

Which Area Is Not Protected by Homeowners Insurance?

Several categories of events and damage types are not protected by homeowners insurance, such as regular wear and tear, certain water damage, and even dog breeds (who knew Fido would cause such a problem?).

While homeowner insurance doesn’t cover everything, there are some additional coverage add-ons you can pay for to bolster your protection.

Dog Breeds

Several dog breeds are automatically excluded from homeowners insurance because of the damage they can cause. In addition to the three dog breeds excluded from all policy types, some companies might have high exclusion rates for other breeds known to cause damage from biting and clawing, like Chow Chows.

Tip: You can get pet insurance to help cover the cost of things like obedience training to reduce your risk of damage.

Water Damage

According to the Insurance Information Institute, 29% of all homeowners insurance claims are for water damage or freezing.

Several types of water damage are excluded from most homeowners insurance policies, including anything you do intentionally, anything resulting from a lack of maintenance, and water damage from sump pump failure.

According to the Insurance Information Institute, the average water damage claim was $11,098.

Certain events are not covered, like “earth movements,” which include landslides, mudslides, and earthquakes, so any claims for water damage from these won’t be approved.

Sewer backup, pipe replacement, or plumbing are also excluded.

Wear and Tear

Everything in your home suffers from regular wear and tear, no matter how well you maintain it. A homeowners insurance policy will not cover repairing or replacing items that have succumbed to wear and tear.

Tip: To prepare for things not covered, like wear and tear, homeowners should set aside money each month for an emergency fund.

Pests, Termites & Animal Infestation

Homeowners insurance is designed to protect against sudden or accidental damage, so it won’t cover damage from small animals like squirrels or rodents, termites, or other pests. If sudden and accidental damage is caused by larger wildlife, such as bears or deer, your policy will likely cover it.

Earthquakes and Ground Movements

As mentioned, “earth movements” or “ground movements” do not fall under most coverage. You can’t typically find add-ons to cover the loss from earth movements either because they are too high risk.

Hurricanes

Many natural disasters are not covered by homeowners insurance policies, including hurricanes.

Some companies allow you to add “windstorm” insurance, but if you live in an area at high risk for hurricanes and tornadoes, you might not get this coverage, or they might limit the amount of coverage.

With hurricanes, your insurance provider will likely evaluate whether the damage was caused by flooding, earth movements, or wind.

Volcanos

Homeowners insurance policies do not cover damage from volcanic eruptions because these fall under the category of ground movements or earth movements.

While your homeowner’s insurance might not cover any damage, if you have comprehensive coverage under your auto insurance, it will cover damage caused by lava flow and sudden damage to your engine caused by volcanic ash.

Tip: While most coverage doesn’t cover ash removal, it will if the ash causes direct physical loss to your property.

Identity Theft

Your typical homeowner’s insurance policy does not apply to Identity Theft damages, including lost wages, legal fees, and other financial institution fees. However, you can purchase identity theft insurance which will cover the cost of restoring your credit.

Expensive Artwork & Jewelry or Other High-End Items

Standard homeowners insurance policies may not extend to expensive artwork, jewelry, furs, or other high-end items.

According to the Insurance Information Institute, standard homeowners insurance policies have an average liability for theft of $1,500.

If you own collectibles, artwork, jewelry, or furs that are valued at more than $1,500, you’ll want to add riders to your homeowner’s insurance for individual items. These are called floater policies, and they allow you to list each of your valuables after a professional appraisal and get coverage for their appraised amount.

Local Building Codes

If you must remodel or repair your home to adhere to local building codes, it can cost a significant amount of money. Unfortunately, without additional riders, your homeowner’s insurance does not cover it either.

Business Equipment

27% of full-time employees work from home in 2023, with another 28% working a hybrid schedule.

If you work from home, if something happens which causes damage that is otherwise covered by your insurance policy, business-related items stored in your home and other business property are not covered. However, you can get a rider to compensate for this.

Exclusion Types What is Not Covered
Dog Breeds
  • Doberman Pinscher
  • Pit Bull
  • Rottweiler
Water Damage
  • Flood damage
  • Water damage from lack of maintenance or negligence
  • Water damage from intentional acts
  • Water damage from earth movements like landslides, mudslides, or earthquakes
  • Water damage from backups
  • Water damage from leaks
  • Seepage or leaks in a foundation
  • The cost of replacing or repairing the source like a washing machine or dishwasher
  • Water damage from a sump pump failure
Wear and Tear
  • Normal deterioration
Pests, Termites & Animal Infestation
  • Damage from small rodents
  • Animal infestations
  • Termite or other pest damage
Earthquakes and Ground Movements
  • Landslides
  • Mudslides
  • Earthquakes
Hurricanes
  • Any water or wind damage
Volcanos
  • Damage caused by lava flow or ash
Identity Theft
  • Credit application fees
  • Legal fees
  • Lost wages
  • Financial institutions fees
Expensive Artwork & Jewelry or Other High-End Items
  • Artwork
  • Jewelry
  • Furs
  • Watches
Local Building Codes
  • Remodels to your home to comply with local building codes
Business Equipment
  • Any at home business equipment
  • Business products you plan to sell which are housed at home

Optional Coverage to Add to a Home Insurance Policy

There are several forms of optional coverage that you can add to your homeowner’s insurance policy. These types of coverage can help fill in the gaps created by a standard policy.

Water Backup Coverage

Where a standard policy does not cover water damage, water backup coverage would cover the costs of water damage repairs, like removing water after a backup or replacing furniture.

Business Property

Business property coverage will apply to all the items in your home that are for a home-based business.

Identity Theft

Identity theft coverage can be added to your homeowner’s insurance policy. This will reimburse you for any legal fees, lost wages, childcare, and other fees associated with restoring your credit.

The average cost of identity theft losses in 2022 was $8.8 billion, according to the FTC.

Floater Policy

As mentioned, a floater policy can provide adequate coverage for valuable items after professional appraisal. These will increase your premiums, but they will give you significantly higher coverage compared to the standard $1,500.

Homeowner Policy Exclusions

Several types of homeowners insurance policies range in terms of coverage and exclusions.

HO-1 Policy Exclusions

HO-1 is the most basic type of coverage. It only protects your home and personal belongings against 10 specific things like fire, explosions, smoke, vandalism, and theft.

Common exclusions for HO-1 include:

  • Falling objects
  • Weight of ice, snow, and sleet
  • Accidental discharge/overflow of water and stream
  • Sudden damage from built-in appliances like a water heater or AC unit
  • Freezing
  • Sudden and accidental damage from a power surge

HO-2 Policy Exclusions

HO-2 covers your dwelling in addition to personal belongings. It provides more coverage against certain types of damage, but there are still exclusions.

Common exclusions for HO-2 include:

  • Earth movement
  • Water damage from flooding, sewer backups, or water from the ground
  • Power failure
  • Neglect
  • War
  • Nuclear hazard
  • Intentional loss
  • Mold, fungus, or wet rot (except if it resulted from an accidental discharge or overflow of water)
  • Wear and tear
  • Smog, rust, or other corrosion
  • Falling objects
  • Animals owned by the policyholder
  • Pests or insects

HO-3 Policy Exclusions

According to the National Association of Insurance Commissions, HO-3 is the most common homeowners insurance policy, and in 2020 made up 78% of policies.

This type of policy covers the home, personal belongings, and finances, but it extends to several dwellings on the property, including attached structures and decks. It also includes personal liability, medical payments, and loss of use coverage if you have to live elsewhere while your home is being repaired.

Common exclusions for HO-3 include:

  • Earthquakes
  • Flooding
  • Local building codes
  • Intentional loss
  • Neglect
  • Nuclear hazard
  • War

HO-4 Policy Exclusions

HO-4 is often called “renters insurance” because it is a policy only for people who rent. It covers the items inside the rental property or anywhere else if stolen or damaged under covered situations.

Common exclusions for HO-4 include:

  • Your dwelling
  • Flood
  • Earthquake
  • War
  • Nuclear accident
  • Mudslide
  • Sinkhole

HO-5 Policy Exclusions

HO-5 is comprehensive insurance, so it offers protection for personal belongings and personal property and the benefit of not having to prove whether the loss is covered or not when you file your claims.

Common exclusions for HO-5 include:

  • Ordinance or law
  • Earth movement
  • Water damage from flooding, sewer backups, or water seeping from the ground
  • Power failure
  • Neglect
  • War
  • Nuclear hazard
  • Intentional loss
  • Mold, fungus, or wet rot (except if it resulted from an accidental discharge or overflow of water)
  • Wear and tear
  • Smoke from agricultural smudging and industrial operations
  • Settling, bulging, or expanding in places like your foundation or walls
  • Pests, rodents, and insects
  • Damage caused by your pets

HO-6 Policy Exclusions

HO-6 is called condo insurance because it is for people who live in any shared unit. The coverage includes medical payments, loss of use, liability, and personal property coverage, but there are still exclusions.

Common exclusions for HO-6 include:

  • High-value items like jewelry or artwork
  • Floods
  • Ground movements
  • Wear and tear
  • Termites or pests
  • Water damage from flooding, sewer backups, or water seeping from the ground

HO-7 Policy Exclusions

HO-7 is mobile home insurance. It has the same coverage benefits as an HO-3 policy but for a mobile home, like an RV, modular home, mobile home, or trailer.

Common exclusions for HO-7 include:

  • Flood damage
  • Earthquakes, sinkholes, or any type of earth movement
  • Wear and tear
  • Power failure
  • Intentional loss

HO-8 Policy Exclusions

HO-8 is modified coverage meant for historic or old homes with unique features or characteristics that could not be easily replaced in the event of damage. HO-8 policies provide the same general coverage as an HO-1 policy.

Common exclusions for HO-7 include:

  • Hurricanes
  • Water damage
  • Floods
  • Earth movements
  • War
  • Wear and tear
  • Intentional loss
  • Falling objects
  • Damage from winter weather

What Does a Standard Homeowners Insurance Policy Cover?

Standard homeowners insurance policies will cover the cost of repairing or replacing your home and the things within your home in the event of damage.

  • Car coverage: Your homeowner’s insurance policy might even extend to your vehicle.
  • Fire coverage: Except for areas prone to annual forest fires, most insurance will cover damage from regular fires.
  • Natural disaster coverage: Natural disasters like hail damage or wind damage are typically covered.
  • Flood coverage: In many places, damage caused by floods is covered.
  • Vandalism coverage: If your home or its contents are vandalized, you can submit claims to have repairs and replacements.
  • Personal injury: Your policy will cover personal injury claims that happen on your property.

How to Choose the Right Coverage for Your Home Insurance?

Buying a home is usually the largest financial investment people make, so finding protection for that investment is essential. But it can still be overwhelming to find a policy that really fits your needs.

According to the Insurance Information Institute, nearly 97% of claims were for theft, water damage, and wind damage.

Location

Where you live will influence the type of coverage, add-ons available, and the expected claims you might file down the line.

High Crime

If your area has a high theft rate, your insurance premiums might be more expensive.

Important: Consider investing in home alarm systems to get discounts with your insurance company.

Weather

Your insurance premiums might increase if you live in an area with a high risk of hurricanes, tornadoes, or hail. You might also have exclusions that apply to add-ons for things like wind damage.

Home

You also want to consider the features in your home, like any safety features, the construction materials used, and how big your home is.

Tip: You can get replacement cost value riders and riders to cover features in your home like a sump pump or water backup system.

FAQs

Is there homeowners insurance that covers everything?

No, there will always be items not covered by homeowners insurance policies, including natural disasters and war.

What is an insurance exclusion?

This provision in your policy eliminates coverage for specific types of damage or acts like hurricanes or volcanoes.

What is the replacement cost vs. fair value?

The replacement cost is how much it would cost to replace the damaged item, usually rebuilding it entirely. Fair value refers to the amount that buyers would be willing to pay.

What is the 80% rule in homeowner's insurance?

This refers to a policy where your insurance company only covers the cost of damage to your house or your property if you have coverage equal to 80% of the replacement value of your property.

How do I check my homeowner's insurance coverage?

You can look at your policy by logging into your online portal, finding the paper copy originally sent to you, or contacting your insurance provider and requesting a copy to check your coverage. You can also just speak with your insurance company about what is covered in what isn’t.

Sources

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