You purchase homeowner insurance for peace of mind. If a natural calamity like a fire or hurricane strikes, insurance can provide you with the financial means to pick up the pieces. However, it’s easy to assume that certain events and damages are covered by your insurance policy when, in fact, they’re not.
As tedious as it may sound, going through every detail of your insurance policy—at least once a year—is necessary to make sure you know what is and isn’t part of your coverage. Why? Because things can change.
“Your insurance company frequently amends definitions in your policy, so one year you may be covered, and the next year, that can turn into an exclusion,” says Lou Haverty, a chartered financial analyst at Financial Analyst Insider in Philadelphia.
We delved into the fine print to focus on the areas that may not be covered. So read our story, then read your policy!
1. Flooding and water damage
Worldwide, flooding is the most common kind of natural disaster, according to Floodsafety.com. In the United States, it causes $6 billion in damage each year. But many people don’t know that their standard homeowner or renters policy typically does not provide coverage for damage caused by flooding, according to Terry Black, vice president of business development at Aon National Flood Services in Blue Springs, MO. “In fact, most regular homeowner and renters policies specifically exclude flood, as an uncovered peril,” he tells realtor.com®.
One of the biggest misconceptions about flood insurance is that you don’t need it if you don’t live in a flood zone. But this type of thinking can be costly.
“Statistics from last year’s Hurricane Harvey revealed that more than 60% of those impacted by flooding were located outside of the Special Flood Hazard or high-risk areas,” says Cynthia DiVincenti, vice president of government programs at Aon National Flood Services in Atlanta. “What’s worse is that 80% of those property owners impacted didn’t have flood insurance and have had to rely on disaster assistance loans to make the needed repairs to their properties.”
Another type of flooding can occur from a natural disaster inside your home. “In terms of water damage, the insurance company is not required to pay for an item which fails,” according to Stacey A. Giulianti, Esq., chief legal officer at the Florida Peninsula Insurance Company, in Boca Raton, FL. “They won’t pay for the actual pipe that broke, or the dishwasher hose; they’ll only pay for the ensuing damage.”
2. Pet damage
If your lovable pets damage your property, don’t look to your insurance company for assistance.
“If personal property like furniture is damaged by cat claws, or if your dog knocks over the TV, it’s not likely to be covered,” says Angat Saini, principal lawyer and founder of Accord Law in Toronto, ON. “Owning a pet is considered a known financial risk that you take on, so you’ll have to pay out of pocket for repairs as a result.”
3. Pest infestation
Although the information is displayed very prominently in most policies, many homeowners don’t seem to know that if pests invade their house, they’ll be paying for that themselves. “We continually get claims from termite damage or rodent infestation, both of which are clearly excluded in the policy,” Giulianti says.
When left untreated, mold can become a serious health hazard. But it’s not covered in most homeowner policies. Moisture in a house from leaks or from improperly vented bathrooms and kitchens can increase the chances of mold, mildew, and harmful bacteria developing. However, insurance won’t cover mold that results from long-term leaks, according to Joseph Giannone, owner of Joseph Giannone Plumbing, Heating & Air Conditioning in Philadelphia.
5. Neglected floors, roofs, and pipes
If you let major systems in your house fall by the wayside, your insurance provider is probably not going to help pay to repair them.
“Just like a belt on a car’s radiator, parts of the home can wear over time, and insurance won’t cover or replace worn roofs and floors or pipes that have been left to rust and crumble,” says Giannone. He says he gets repair calls for floors, roofs, and pipes on a regular basis and has to explain to surprised homeowners that the damage is not covered by their insurance policy.
That’s why it’s important to perform routine home maintenance so you can spot and address big problems before they spiral out of control.