Which area is not protected by most homeowners insurance?

What is covered by homeowners insurance?

Knowing what your homeowner's insurance covers often requires reading the small print of your policy. Even though all home insurance coverage is different, almost all policies share similarities and have coverages in common.

Homeowners insurance typically protects you financially from damages related to your home and its contents. Whether your house is burgled or a fire causes irreparable damages, a homeowners' insurance policy can pay for repairs, replacements, or rebuilding of the structure altogether.

Another crucial facet of homeowners insurance is legal liability. Your home policy can pay for legal expenses if a property loss or injury results in a lawsuit against you.

Home insurance is designed to protect you against covered losses, but most standard policies exclude certain types of damages.

Your home is one of your most significant investments, so understanding which area is not protected can help you determine if you need extra protection with additional coverage.

We will detail which areas of your home are and are not protected by most homeowners insurance.

Table of contents

Which area is protected by homeowners insurance?
Which area is not protected by most homeowners insurance?

Which area is protected by homeowners insurance?

Most home insurance policies cover the following:

Dwelling coverage
Contents (or personal property) coverage
Liability coverage
Loss of use coverage
Other structure insurance

1. Dwelling coverage

Homeowner insurance covers the home itself. Known as dwelling coverage, this pays for repairing or rebuilding your home in case of damage to the house itself. For example, the house’s structure, including the roof, walls, and some attached structures.

Covered events that might cause damages include fire, vandalism, floods, extreme weather, and natural disasters. Dwelling coverage also protects your house’s plumbing, electrical, and heating systems.

If covered events destroy your house and you have nowhere to stay, a home policy may pay for additional living expenses such as a short-term rental.

2. Contents (or personal property) coverage

This insurance type financially protects the contents of your home. Contents insurance, sometimes called personal property, covers any lost or damaged personal belongings, such as appliances, furniture, and household items.

If you need to replace your items after a fire, contents insurance can help pay for everything covered. It can also protect these items in the event of a burglary.

Contents insurance is divided into replacement-cost and actual cash value coverage. The former will provide enough financial compensation to replace your covered items without considering depreciation.

However, actual cash value coverage accounts for depreciation. As such, the compensation amount you receive for your old electronic equipment, for example, may not be enough to buy a new one.

3. Liability coverage

This coverage protects you against claims if someone’s property is damaged or they are injured while at your house (or property). This part of your home policy covers legal fees, medical bills, and other expenses if someone sues you.

Suppose you have guests over for dinner, and someone trips on broken flooring. They might face severe injuries and need to take time off work. In this case, you may be sued for damages.

You can shoulder the cost of legal fees and damage awards with homeowner insurance. Liability coverage will take the financial brunt on your behalf.

4. Loss of use coverage

In addition to the above, loss of use coverage can be a separate policy.

If your house becomes inhabitable and is being repaired, this coverage can help you pay for alternative accommodation.

5. Other structure insurance

Additionally, other structure insurance can be a separate policy from dwelling coverage.

This policy covers any external parts of your house that are separate from the main structure, such as a detached shed, music studio, or garage.

Which area is not protected by most homeowners insurance?

Most homeowner policies do not cover damages caused by the following situations:

Wear and tear
Neglect
Mold
Pests and infestation
Sewer backup
Flooding
Earthquakes
Business equipment
Jewelry or artwork
Power outages
Nuclear hazard
War
Dog bites

These are the areas that are not protected by most home insurance.

1. Wear and tear

Everyday wear and tear damages are typically excluded from most homeowner insurance.

For example, your home insurance likely won’t pay for costs associated with your home’s plumbing system malfunctioning due to wearing out over time.

However, accidental events are usually covered, such as in the case of burst pipes, but there may be exceptions that apply.

2. Neglect

The damages that arise due to neglect typically aren’t covered by homeowner insurance. Wear and tear damages are sometimes in the same category as negligence.

Other common examples include mold and pest infestations. While these issues can cause extensive damage to your home, they are usually deemed as improper care of one’s home.

Suppose you didn’t notice you had leaking pipes, which caused mold. Water damage may not be under the responsibility of your insurance policy. Whatsmore, burst pipes are another area that insurers may deem as neglect depending on the circumstances, as mentioned above.

3. Mold

Sometimes categorized under neglect, mold damage is avoidable. Insurers often consider it neglect as mold can be prevented before it affects your house.

Mold can be costly to remove and repair the damages caused by it. As a homeowner, you should be aware of this issue.

4. Pests and infestation

Another form of negligence is the damage caused by pests, such as vermin. Pests can cause serious damage to your house. However, repair costs associated with rodents are typically not covered by homeowner insurance.

Preventing pests from taking residence in your home is considered part of maintenance by most insurance companies, for which you are responsible.

5. Sewer backup

This unfortunate issue can arise when a significant amount of rain, melting snow, or sewer blockages cause floods within a home.

A sewer backup can cause extensive water damage to areas of your home connected to blocked or broken pipes, such as a basement. Depending on the reason for the backup, the repair costs may be on you.

Homeowner policies commonly don’t cover sewage backup, but your insurer may cover it in a separate flood insurance policy.

6. Flooding

Although some forms of flooding are covered by most homeowner insurance (such as leaking pipes - with exception), flood damage caused by weather events is not.

In addition, any natural water damage caused by extreme rainfall typically won’t be covered.

So if you reside in an area prone to extreme rain and flooding, be aware that you may need a separate policy to cover such events.

7. Earthquakes

Natural disasters involving the Earth moving, such as earthquakes, landslides, sinkholes, and mudslides, are typically not covered by homeowners insurance.

Insurance providers are hesitant to cover such events in full, as a natural disaster can affect many homeowners at once.

Therefore, separate policies are available to add to your homeowner's policy to cover natural disasters. Earthquake insurance is an essential policy for earthquake-prone areas to help protect against these situations.

8. Business equipment

If you own a business, your homeowner policy will not cover your company’s assets. Furthermore, home insurance may not include protection for your business equipment, such as computers, if you work from home.

Suppose you’re a consultant and have a home office. Home insurance might not cover your setup in case of a burglary, fire, or other covered loss. In that case, you’ll need a business insurance plan to help protect your business assets.

9. Jewelry or artwork

Although contents insurance (or personal property coverage) covers most of your belongings inside your home, there are limitations.

Homeowners insurance does not cover expensive personal property like expensive jewelry and artwork. These costly items usually require a separate policy.

Homeowners insurance excludes these items as they are expensive to replace and are a target for burglars.

10. Power outages

Most home policies do not cover damages caused by electricity company power surges and outages.

Although, if a power failure in your house causes fire damage, the insurance may cover it.

11. Nuclear hazard

This exclusion refers to any nuclear hazard, such as radiation.

This issue is not covered in most homeowner policies. However, fire damage caused by nuclear reactions may be covered.

12. War

Insurance companies and home policies do not cover damages caused by war. Whether a civil or nuclear war, they are excluded from any homeowner policy.

13. Dog bites

Most homeowner insurance covers medical bills and legal fees caused by dog bites.

However, dogs categorized as aggressive are blacklisted by most insurance companies such as Akita, Pitbull, Staffordshire Terrier, or German Shepherds.

Key takeaways

Home insurance is designed to protect you financially against covered losses, but most standard policies exclude certain types of damages.

Certain disasters, such as earthquakes or flooding, are typically not covered by most standard home policies and require specialized coverage.

Specific fundamental issues are covered by most home insurance, but policies vary, so always read the details and know the exclusions.

A home insurance policy can pay for repairs, replacements, or rebuilding a home’s structure, whether your house is burgled or a fire causes irreparable damages.

Most policies can help pay for legal expenses if a property loss or injury results in a lawsuit against you.

Homeowners' insurance might overlap with other types of insurance coverage.

Bottom line

Home insurance is an essential policy to have as a homeowner. It can protect you from financial stress if your home is damaged or destroyed by covered losses.

Knowing what your homeowners' policy doesn’t cover is as important as knowing what it does.

Understanding your policy limits allows you to purchase additional coverage to fill the gaps and be fully protected.