Understanding what your homeowners insurance doesn’t cover is just as important as knowing what it does. Avoid costly surprises by learning about these common coverage gaps.
1. Flood Damage
Why It’s Excluded: Standard homeowners insurance policies specifically exclude flood damage due to the catastrophic nature and predictable geographic risk of flooding.
What You Need: Separate flood insurance through the National Flood Insurance Program (NFIP) or private insurers. Even if you’re not in a high-risk flood zone, flooding causes billions in damage annually across all areas.
Average Cost: $700-$1,500 annually, but can be as low as $400 in moderate-risk areas.
2. Earthquake Damage
Why It’s Excluded: Earthquakes are considered catastrophic events with concentrated geographic risks, making them too expensive to include in standard policies.
What You Need: Earthquake insurance as a separate policy or endorsement. Essential if you live in California, Alaska, Washington, Oregon, or other seismically active areas.
Important Note: Earthquake insurance typically comes with high deductibles (10-25% of dwelling coverage) and may not cover land damage or pools.
3. Normal Wear and Tear
What’s Not Covered:
- Deteriorating roof due to age
- Rusting pipes or appliances
- Cracking foundation from settling
- Aging HVAC systems
- Worn carpets or flooring
Why: Insurance covers sudden, accidental damage—not gradual deterioration from age or lack of maintenance. Regular home maintenance is your responsibility.
4. Maintenance Issues and Neglect
Examples of Excluded Damage:
- Water damage from a slow leak you ignored
- Mold growth from unaddressed moisture problems
- Pest damage (termites, rodents, etc.)
- Structural problems from deferred maintenance
The Rule: You must maintain your home in good condition. If damage results from neglect, your insurer can deny the claim.
5. Sewer Backup and Sump Pump Failure
Why It’s Excluded: Standard policies don’t cover water damage from sewers, drains, or sump pumps backing up into your home.
What You Need: Water backup endorsement, typically costing $40-$250 per year for $5,000-$25,000 in coverage. This is one of the most important add-ons you can purchase.
Coverage Includes: Backup from sewers, drains, sump pumps, and septic systems.
6. Certain Types of Water Damage
Not Covered:
- Groundwater seepage through foundation
- Surface water entering through doors or windows
- Damage from long-term leaks
- Water damage while home is vacant (typically 30+ days)
What IS Covered: Sudden and accidental water damage, such as a burst pipe or water heater failure.
7. Mold (With Exceptions)
Limited Coverage: Most policies provide limited mold coverage ($1,000-$10,000) only if it results from a covered peril like a burst pipe.
Not Covered:
- Mold from humidity or condensation
- Mold from long-term water problems
- Mold from flooding
- Mold remediation beyond policy limits
What You Can Do: Purchase additional mold coverage endorsement or maintain proper home humidity levels to prevent mold growth.
8. Business Activities
Not Covered: Liability or property damage related to home-based business activities, business property, or business visitors.
Examples:
- Client injured at your home office
- Business equipment damaged in a covered loss
- Liability from products you sell
- Employee injuries
What You Need: Home business endorsement or separate business owners policy (BOP), depending on your business size and nature.
9. Certain Valuable Items (Sub-Limits Apply)
Items With Low Limits:
- Jewelry: $1,500 limit typical
- Cash/coins: $200-$500 limit
- Firearms: $2,500 limit
- Fine art: $2,500 limit
- Collectibles: $2,500 limit
- Silverware: $2,500 limit
What You Need: Scheduled personal property endorsement or separate valuable items policy to insure high-value possessions at their full value.
10. War, Nuclear Hazards, and Intentional Loss
Universally Excluded:
- War or military action
- Nuclear accidents or radiation
- Government action (seizure, condemnation)
- Intentional damage by you or anyone in your household
These exclusions are standard across all homeowners policies and cannot be added through endorsements.
11. Dog Bites (Breed Restrictions)
The Issue: Many insurers exclude or limit coverage for certain dog breeds considered high-risk.
Commonly Restricted Breeds:
- Pit Bulls
- Rottweilers
- German Shepherds
- Doberman Pinschers
- Akitas
- Chows
What You Can Do: Disclose your dog breed to your insurer, seek companies that don’t discriminate by breed, or purchase umbrella liability coverage.
12. Vacant Home Damage
The Rule: Most policies exclude coverage if your home is vacant for more than 30-60 consecutive days.
What You Need: Vacant home insurance or notify your insurer about extended vacancy. Note that “vacant” (empty of possessions) differs from “unoccupied” (temporarily empty of people).
How to Protect Yourself
1. Read Your Policy Carefully: Don’t wait for a claim to discover what’s not covered. Review your policy declarations and exclusions annually.
2. Ask About Endorsements: Many coverage gaps can be filled with relatively inexpensive endorsements.
3. Document Everything: Keep records of home maintenance, improvements, and valuable possessions.
4. Maintain Your Home: Regular maintenance prevents many denied claims and keeps your home in insurability.
5. Communicate With Your Insurer: Notify them of changes like home businesses, valuable acquisitions, or property modifications.
Recommended Endorsements
Consider adding these endorsements to fill common coverage gaps:
- Water Backup Coverage: $40-$250/year
- Equipment Breakdown: $30-$100/year
- Scheduled Personal Property: Varies by item value
- Extended Replacement Cost: 10-20% premium increase
- Inflation Guard: Automatic coverage increases
Need help understanding your coverage? Check our coverage types guide for detailed explanations, or compare insurance companies to find the best policy for your needs.