3 Common Things Home Insurance Doesn’t Cover

Written By Jeff Hindenach
Last updated February 20, 2020

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February 20, 2015

Simple. Thrifty. Living.

Having a home insurance policy undoubtedly gives you a feeling of security, which is entirely appropriate. However, it’s important to make sure the secure feeling you’re enjoying is based in fact rather than in a mistaken idea of what your homeowner’s policy covers. Here are three common areas that homeowners’ policies typically do not cover:

Generally, insurance policies place a $1,000 limit on cash, jewelry, artwork, or collections of rare objects. You can usually purchase a separate rider (an extra provision added to your standard policy) for jewelry or art, as long as you document the true value of what you own. Large sums of cash, on the other hand, are tough to document; how will you prove to the insurance company that you had as much cash as you claim? For that reason, it’s safest to bank your stash of cash.

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The federal government tries hard to spread the word that homeowner’s insurance policies generally do not cover flood damage. Furthermore, most victims of flood damage don’t qualify for any free federal reimbursement for expenses related to flood damage, because those funds are only released when a flood event is declared a national disaster. To be safe, a homeowner should purchase federal flood insurance, which is available in both high and low risk areas.

These pests can set up home anywhere that damp wood or plant material are in contact with the house. Over time, they do serious damage to wooden support beams and other structural elements, requiring extensive home renovations. A National Pest Management Association statistic quoted by Fox Business states that termite damage costs American homeowners $5 billion each year. Home insurance policies aren’t available to cover this type of damage, because it’s considered a home maintenance issue. To protect your investment, keep your eyes open for any insect activity and learn how to avoid creating good termite habitats. When buying a home, it’s a good idea to have it inspected by a licensed pest inspector.

These are only three of the exclusions in your home insurance policy; many other potential causes of damage are also excluded. Appliances and other parts of the home may also not be covered, but home warranty companies can help covering those items. Our HomeServe reviews can give you a good idea about how home warranty companies work.

It’s a good idea to review the likeliest causes of home damage in your area and then have a conversation with your insurance agent about the best way to insure yourself against them. You’ll sleep better knowing that your home is well-protected.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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