What does homeowners insurance not cover?

The typical homeowner's insurance policy, also known as an HO-3, ensures your house is against various risks, but there are a few critical exclusions. Knowing what is and isn't covered can save you a lot of money and pain in the long run.

Water and earthquake damage

Most conventional policies in most states do not cover earthquakes, sinkholes, and other earth disturbances. In all states except California, earthquake insurance can be obtained as an endorsement (supplement) for a charge. Flood insurance, which covers mudslides, must be obtained separately and is only available through the government's National Flood Insurance Program.

Other sorts of water damage aren't included either. Your standard coverage will not cover damage caused by overflows or backups from your sump pump, sewer system, or drains. However, coverage may be obtained by adding a second endorsement.

Issues with upkeep

Taking good care of your house can save you money on pricey repairs that your homeowner's insurance won't cover.

Many things that aren't covered by your standard policy are usually the result of carelessness and a failure to maintain the property properly. Damage caused by termites and insects, birds or rodents, rust, rot, mold, and regular wear and tear. Damage from pollution or smoke generated by industrial or agricultural activity is also not covered.

If something is poorly manufactured or has a concealed fault, it will permanently be excluded from coverage. The same can be said for any mechanical failure.

Furthermore, if your home experiences a power outage, items such as food spoilage are not covered by a standard policy.

Other restrictions apply.

Damage caused by war or nuclear peril is not covered by your homeowner's insurance, which is something no one wants to think about. Expenses incurred due to identity theft are likewise not covered. However, this coverage can be added as an endorsement.

If you own a watercraft, your insurance will usually cover it up to $1,000 if it is taken from your home, but not if it is stolen from another location. Liability coverage is also available for crafts with less than 25 horsepower on most policies.

Some property insurance coverages are limited

The following are covered only to a limited extent:

• Firearms, furs, watches, silverware, and gold are all valuable items. A standard policy covers theft of jewelry for $1,000.
• Replacement cost - To establish the settlement amount for any lost or damaged property, most plans employ an actual cash-value basis, which takes depreciation into account. A replacement cost endorsement can be added to a policy, allowing claims to be paid based on the cost of replacing specified lost objects rather than depreciation.
• Higher liability and medical payments – Liability for third-party medical expenses and legal fees for defending claims might be unreasonable. Increasing the liability limitations on your insurance policy might help you protect your financial future.
• Endorsements can be added to your insurance to provide additional coverage.