Understanding what home insurance does not cover can help you protect yourself, your loved ones, and your assets
By Dawn Allcot
Most people think of home insurance as their protection should they lose everything in a house fire.
You probably also know it can protect you from being sued if someone is injured on your property. It may also help pay for their medical costs.
It may also pay for repairs to your home or to replace your belongings in the event of a fire or a storm.
For instance, if your fence falls or roof shingles blow away during a hurricane, your home insurance should pay to fix or replace it.
And if your home is robbed, your home insurance should pay to replace stolen items, as well as any damage to your home.
But it’s also important to know what home insurance does not cover.
What Home Insurance Does Not Cover: The Big Picture
Home insurance coverage falls under four categories: Dwelling, Other Structures, Personal Property, and Liability.
The first three apply to your home, your land, other structures on your land (such as a shed or detached garage), and the items within your home and on your land.
The fourth applies to your home’s residents and visitors to your home and property.
Knowing what home insurance does not cover can keep you from wasting time making claims that your insurance company won’t accept.
By understanding the limits of your home insurance coverage, you can determine if you need an additional policy, like flood insurance or earthquake insurance, or if you need to add riders to your existing policy.
Home insurance can be complicated.
We urge you to speak to your insurance agent if you have any questions about your coverage, your limits, and your liability in specific situations.
Knowing the Four Basic Exclusions on Home Insurance Policies Can Help You Protect Your Home
Certain situations are not covered by most home insurance policies. The following exclusions apply to your dwelling, other structures on your property (such as sheds, decks, outdoor living areas, and detached garages), and your personal property within your home and other structures.
Your Home Insurance Policy Does Not Protect Against Flooding
Your home insurance policy may cover water damage to your home, but not flooding.
What’s the difference?
The Federal Emergency Management Agency (FEMA) defines flooding, very specifically, as a general and temporary condition of partial or complete inundation of normally dry land areas from the overflow of inland (rain) or tidal waters, the unusual and rapid accumulation or runoff of surface waters from any source, or mudslides.
In plain language:
If heavy rains cause an accumulation of water on your street and that water reaches your home, that’s a flood.
If a water main breaks and your home floods as a result, that is considered a flood.
If the Long Island Sound or Great South Bay experiences overflow due to a hurricane or storm, with high tides reaching your home and causing damage, that’s a flood.
During a flood, waters begin on the ground and rise.
However, if heavy rains cause damage to your roof and the water comes in, damaging your ceiling, walls, and floors, that is not considered a flood. Your insurance company is likely to pay for the damage.
The National Flood Insurance Program paid out $7.1 billion in losses following Hurricane Sandy.
If you live on or near the South or North Shores of Long Island, you may want to ask your insurance agent about flood insurance to protect your home.
Your Home Insurance Policy Does Not Cover Seepage
Similarly, your home insurance policy won’t cover damage caused by water seepage. For instance, let’s say your town experienced heavy rains and water began seeping into your basement. The damage may not be immediately noticeable – and it may not be covered by your insurance.
You can prevent against the damage of seeping by keeping an eye on your lower level and basement during storms, and ensuring your property has proper drainage to direct water away from your home’s foundation.
Home Insurance May Not Cover Damage Caused by an Earthquake
In general, home insurance does not cover damage caused by an earthquake.
However, there are a few exceptions.
Your home insurance may cover damage caused by a fire or an explosion that occurred as a result of the earthquake. Speak to your agent if you have any questions about your dwelling and personal property coverage following earthquake damage.
To protect your home in the event of an earthquake, you may consider purchasing earthquake insurance.
If you get news of an impending earthquake, you may consider removing items – such as photos and T.V. screens – from walls. It might make sense to carefully pack and store valuable, fragile items such as china and glassware.
Earthquakes don’t happen often on Long Island, but they do occur. Be aware of the possibility and know what to do in an earthquake emergency to minimize property damage.
You Can’t Make a Claim for an Intentional Act
Your home insurance does not cover intentional acts. This should be obvious, but it’s worth mentioning. You can’t set your home on fire and make an insurance claim. Not only is arson considered insurance fraud, it’s also against the law.
That’s an extreme example, of course.
If you tried to damage your fence because you want a new one and the insurance company finds out, your fence won’t be covered. You may also be sued for insurance fraud, costing you time and money and making it more difficult to get insurance in the future.
Home Insurance Does Not Cover Losses Caused by War
Let’s hope those of us in the U.S. never have to face war on our homeland. If we do, you should know that your home insurance won’t cover damage caused by weapons discharge or damage from a nuclear incident. This applies to declared war as well as war-like circumstances.
Your Home Insurance Won’t Cover Damage Caused by Neglect or Normal Wear-and-Tear
If you allow your home to fall into a state of disrepair, or don’t take steps to prevent damage to your home, your home insurance may not cover the cost of damage.
Home insurance also does not cover damage that is a result of normal wear-and-tear.
Typically, your home insurance policy will cover damage to your dwelling, other structures, and personal property that occurs from a sudden, instantaneous, and unforeseen occurrence.
Your Home Insurance Policy Won’t Cover Damage Caused by Pets or Livestock
If your new puppy tears up your leather sofa, you can’t file a home insurance claim to replace the furniture. Similarly, if you have chickens and they destroy their coop, although the coop is located on your property, the damage caused by the chickens isn’t covered.
Your pets or livestock are also not considered “property,” for the purpose of home insurance, and your home insurance policy does not cover their injuries or illnesses.
What Else Is Not Covered by Your Homeowners’ Insurance?
Unless you add an “endorsement,” to your policy, which is a rider that states your home insurance policy covers a specific loss, the following items are typically not covered on most home insurance policies.
Boats and Watercraft
Do you own a boat? Ask your insurance agent about separate watercraft insurance. Even if your boat is parked on your property it is not usually covered by home insurance.
It may cost less to add a boat to an existing home insurance policy than to take out separate watercraft insurance.
Motor Vehicles Parked on Your Property
If a tree falls in your driveway, hitting the car of a friend who is visiting you, it won’t be covered by your home insurance policy. Similarly, if that tree hits your own car, you’ll need to file a claim through your auto insurance provider, not your homeowner’s insurance.
Home insurance does not cover motor vehicles parked on your property, whether they are owned by you or someone else.
However, your insurance agent may be able to save you money by bundling your home and auto policies together.
Your Vacation Home, Rental Property, or Secondary Residence
Most home insurance policies cover a single dwelling and property.
You may be able to save money by adding a rider to your home insurance policy to cover a second home or rental property, rather than taking out a separate homeowners’ policy for that location.
Losses from Your Home-based Business
If your home office goes on fire and you lose merchandise from your e-Bay store or direct sales business, or even a computer and office furniture used exclusively for business, these items may not be covered on your home insurance policy.
Also, your home insurance does not cover lost income based on an event that occurred in your home, such as fire, theft, or storm damage.
If your home-based business is worth a significant amount of money or is your sole means of income, ask your broker about a business insurance endorsement for your homeowners’ policy.
Personal Property Beyond Your Policy Limits
Most home insurance policies have relatively low limits to replace personal property that may be damaged or stolen. For instance, most policies won’t be enough to cover fine art or diamond jewelry.
If you have expensive jewelry, artwork, or home electronics, ask about a personal property endorsement to increase your coverage limits for these valuable items, and make sure to get a home inventory so you can easily claim these items if a loss occurs.
Understand Liability and Personal Injury Coverage
Just as important as insurance coverage for your dwelling, personal property, and other structures is liability coverage. This insurance might pay medical bills or other expenses if someone is hurt on your property.
Whether or not the injury was due to negligence by the homeowner determines to what extent home insurance will pay the medical costs and expenses of the injured party. In most cases, injuries in your home that happen to visitors – but not the home’s residents – will be covered by insurance to some degree.
Coverage E on Your Home Insurance Policy Protects You from Legal Consequences
If your front steps are broken or falling apart and a friend visiting your home trips, falls, and breaks an ankle, the personal liability segment of your home insurance will cover your friend’s medical bills, lost income, and pain and suffering up to the limits of your policy.
Similarly, if someone trips in a hole in your lawn, they can make a claim against your home insurance policy. Inside your house, if a heavy bookcase was not anchored down and falls on a friend, you could be liable, and your first course of action will be to make a home insurance claim.
Most home insurance policies cover personal liability up to $100,000. It’s wise to increase this coverage to $500,000, since medical bills and other expenses can add up.
If your policy does not cover all the person’s medical bills, lost income, and pain and suffering, that person can sue you, personally. Your home insurance will cover your defense costs, too.
When it comes to protecting your assets beyond your dwelling and personal property, personal liability coverage is the most important part of your home insurance policy.
Coverage F Can Help a Friend Who Is Injured on Your Property
Let’s say someone gets hurt on your property or inside your home, but it was no one’s fault – or even their own fault. You did nothing wrong, and your dwelling and property was constructed to code and would be deemed safe by any reasonable person.
A good example is a relative who visits for Thanksgiving dinner and cuts himself while carving the turkey. There was nothing wrong with your knife, the cutting board, your kitchen, or even the turkey. Accidents happen.
However, if the injury is bad enough to need medical treatment, you can file a claim against your home insurance to help with medical costs up to $5,000.
It’s better for your friend or family member to use their own healthcare coverage for treatment, because any home insurance claims can damage your insurance credit rating, which is a factor in determining your home insurance costs.
But if your visitor doesn’t have medical coverage, you should know that they are covered under your home insurance policy.
Your home insurance does not cover injuries on your property that happen to you, your spouse who lives in the home, immediate family living in your home, or anyone else who makes your home their permanent residence.
Personal Injury and Liability: What’s Not Covered
Your home insurance policy won’t cover medical or legal costs beyond your coverage limits.
It also won’t cover injuries caused by any acts that are intentional or illegal. So if you get into a fist fight and break your friend’s nose, insurance won’t pay medical costs for your friend’s injury or any legal costs you may incur.
Your home insurance policy will not cover intentional acts of violence under any circumstances.
It also won’t cover slander, libel, and other personal or financial injuries. This is especially important to understand in today’s age of social media, when a few poorly considered words can change someone’s life and livelihood in minutes.
Fortunately, there is a way to protect yourself against nearly any contingency through riders, or additions, to your home insurance policy.
Using Endorsements to Extend Your Home Insurance Coverage
Most of the items listed in this article, from libel to watercraft damage, can easily be covered in a package endorsement with just a slight increase in your insurance premium.
Ask your broker about what home insurance does not cover on your specific policy, and how you can fill any gaps with affordable endorsements.
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