All the Stuff Homeowners Insurance Doesn’t Cover

If you’re lucky enough to own your home, you undoubtedly have experience the pain of shopping for homeowner’s insurance (if you have a mortgage, you likely had no choice in the matter, since lenders typically require it in the terms of the loan). Considering the money you’ve sunk into what’s likely your largest asset, the peace of mind insurance gives you might make the process and the premiums seem like a small price to pay for peace of ming—right up until you call your insurer to make your first claim, and the friendly voice on the other end of the line informs you that your homeowner’s insurance covers but a surprisingly narrow list of unfortunate events.

I’m here today to tell you (from bitter experience) that the most common word you’ll hear from your insurance agent during the claims process is “no.” If you think you’re safe from natural and financial disasters because you’re shelling out for homeowner’s insurance every year, think again. Here’s all the stuff your policy probably doesn’t cover.

Natural disasters

This one blows the minds of new homeowners on a regular basis: Homeowners insurance typically only covers some natural disasters or “Acts of God.” Earthquake shakes your house to pieces? Too bad. Sinkhole opens in your living room? Hope you’ve got some savings, because insurance won’t care. When my house was flooded by a hurricane a few years ago, my insurance agent sighed sadly and told me there was nothing—literally nothing—he could do to help.

Deferred maintenance

Generally speaking, anything that you would be reasonably expected to keep in good repair and working order in your house won’t be covered. If you fail to have your roof repaired and it leaks and causes mold and water damage, your insurance won’t pay you a dime, because you really should have maintained your home better. The best way to think about this is that insurance covers—at best—unforeseen events. If you know something is potentially a problem you should get it fixed or replaced pronto, because your insurance won’t help when it causes a much larger mess.

Sewer backups and water damage

You might think that raw sewage backing up into your house would be one of those “unforeseen events” that insurance should cover, but it rarely does. You can—and probably should—purchase a separate policy (or “rider”) for such events. This also goes for a wide range of water damage claims—if the water damage stems from a sewer backup, flood, or slow leak from a poorly maintained roof, you’re pretty much SOL on the insurance end. However, “sudden and accidental” water damage—from a burst pipe, for example, as long as the incident wasn’t due to neglect—may be covered.

Bug and rodent infestations

Infestations of bugs, like termites or carpenter ants, or rodents such as mice or squirrels likely aren’t covered by your insurance, because the problem is typically blamed on your failure to handle proper maintenance. Bugs and pests can cause a lot of expensive damage to your house, but your insurance agent will probably tell you that you should have been paying closer attention and called an exterminator sooner, so the policy won’t pay out on it.

Trampolines, diving boards, and tree houses

If you think about it, it’s unurprising that your homeowner’s policy is pretty anti-fun. Things like trampolines and diving boards are typically excluded from coverage because they’re considered to be obviously dangerous. If they are, you might be able to buy a rider on your main policy to cover them—but don’t assume they’re covered just because they’re physically part of your property.

Renovation damage

Many folks assume that if you damage your house during a renovation your homeowners insurance will kick in, but this isn’t a guarantee. Your policy might cover some renovations, but check with your agent before proceeding with that assumption. Some policies won’t cover anything resulting from a renovation, while others might cover a certain amount.

One thing to keep in mind is that your insurance will almost never cover problems stemming from a non-permitted renovation. If you skipped pulling permits in order to reduce costs, or you decided to do a DIY renovation without licensed contractors, you probably won’t get a payout if you accidentally burn down half your house or your sketchy backyard deck collapses.

Business use

If you ever rent out part or all of your house to guests through a platform like Airbnb, any damage that occurs as a result is probably not covered. Your insurer will likely consider this a “business use” of your home, and expect you to take out separate insurance to cover that liability. In other words, if people rent your house for the weekend through VRBO and destroy it in the process, you won’t get any relief from a standard homeowner’s policy.

Service lines

The utilities that serve your house—electricity, gas, and water—are a complex issue when it comes to insurance. Most standard homeowners policies only cover the pipes and wires inside the house—the portion of the service lines that are outside the house, even if they’re on your property, aren’t covered. That means that if a water pipe bursts in your basement you likely have a claim, but if that same pipe bursts in your backyard and floods your basement, you probably don’t. The good news is that you can usually purchase additional coverage from your insurer or a “protection plan” of some sort from your utility company that will act as additional insurance in those cases.

Homeowners insurance policies differ, so it pays to sit down and read yours, and contact your agent with any questions you might have. You might be surprised—pleasantly or otherwise—at what’s actually covered in your policy, and understanding that means you can take steps like buying additional coverage. At the very least, understanding what’s actually covered means you can plan ahead for those nasty Acts of God.