What Homeowners Insurance Does Not Cover

Written By Guest Post
Last updated February 2, 2021

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November 7, 2016

Simple. Thrifty. Living.

Earthquakes, floods, fires – OH MY! Consumers often don’t realize that homeowners insurance doesn’t cover certain costs related to major damage. When it comes to a major catastrophe more than just minor damages may occur to your home, and most people assume their homeowners insurance will cover the costs. Unfortunately that is not always the case, and below we cover the most common items that aren’t covered under homeowners insurance.

Flooding, super storms and flash flooding fill the news almost daily, and many affected are unable to rebuild due to the lack of flood insurance. Even with flood insurance those affected are receiving minimal payouts, nowhere near what they need to repair damages or rebuild.

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Many don’t realize that their insurance does not cover earthquake damage. Individuals living in high risk areas often don’t have coverage; one must purchase earthquake insurance in addition to their renters or homeowners insurance. This type of insurance has several exclusions and one’s payout is based on percentages. For example, your deductible is based on your overall policy limit, meaning your deductible will be a percentage (typically 10-15%) of the value of your structure. Of course deductibles tend to be higher in the states at greatest risk for earthquakes such as California, Washington and Oregon. When it comes to your possessions, earthquake insurance has set a dollar amount for each group of items in your home, like electronics, furniture and jewelry.

Fire and smoke damage costs are typically included in homeowners insurance, however it is imperative to read the fine print on any policy. Depending on the type of homeowners insurance you purchase you could be looking at several different types of payouts. Typically there are three levels, these different levels affect your deductible, monthly cost and, of course, payout.

Homeowners insurance also doesn’t cover appliance breakdowns and other individual parts of the house that can sometimes need fixing or replacing. That is where home warranty services come in. You can sign up for a home warranty to cover all of the gaps. Here is our list of the best home warranty companies, including our review of HomeServe USA.

Trying to figure out which insurance company to use can be overwhelming and incredibly time-consuming. Check out our Insurance Finder above to find home insurance options in you area.

Once you have decided on coverage make sure you follow these tips:

  • Be aware of your coverage limits – many times specialized coverage has varying payouts.
  • Review your deductibles for each type of coverage you purchase – earthquake, fire and flood insurance all have different deductibles.
  • Contact your current carrier to see what speciality coverage they offer, you may get a better deal by combining coverage.
  • It’s better to be covered – find the right type of insurance today.

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