A homeowners policy covers a lot, which is exactly why its exclusions catch people off guard. Here are the five that surprise homeowners most, and what to do about each.
1. Flood
Flood is excluded from every standard homeowners policy. It is covered by a separate flood policy, through the national program or private carriers. Flooding is not limited to coastlines and floodplains; heavy rain, runoff, and failed drainage cause flooding well outside high-risk zones. If your home could ever take in water, flood coverage is worth evaluating.
2. Earthquake
Earthquake and earth movement are also excluded and bought separately. In seismic regions this is a major exposure, and even modest shaking can cause costly structural damage that the homeowners policy will not touch. In Oregon and Washington this gap is especially common, and we cover it in depth in earthquake insurance in Oregon and Washington.
3. Valuables above the sublimits
Jewelry, art, watches, firearms, and collectibles are covered only up to low internal category limits, often a few thousand dollars, and theft limits can be lower still. To fully protect valuable items, you schedule them, which raises the limit and broadens the covered causes of loss.
4. Business conducted at home
Running a business from home creates exposures the homeowners policy largely excludes: business equipment above a small cap, and liability tied to the business. A home-based business usually needs an endorsement or a separate business policy.
5. Maintenance, wear, and neglect
Insurance covers sudden, accidental loss, not gradual deterioration. Wear and tear, rot, pest damage, and the consequences of deferred maintenance are not covered. Keeping the home maintained is part of keeping it insurable.
A few more limits worth knowing
The five above are the big ones, but a policy has other edges that matter when you compare quotes. Sewer and drain backups are usually excluded unless you add water backup coverage. Cosmetic roof damage and older roofs may be limited or settled at actual cash value, which we cover in roof coverage. Short-term rental activity, like renting through Airbnb or Vrbo, and extended vacancy can both create coverage issues a standard policy was not written for. Mold and long-term seepage are typically capped or excluded, a gap covered in detail in hidden water damage, seepage, and mold. If any of these apply to your home, raise them before you switch.
None of these mean the policy is weak. They mean coverage has edges, and the time to learn them is before a loss. A coverage review walks your specific home and household against these gaps and tells you which ones matter for you.
Questions to ask your advisor
- Do I have separate flood and earthquake coverage, and do I need them for my location?
- Are my jewelry, art, and other valuables scheduled, or capped at the internal limits?
- Does any business I run from home need its own endorsement or policy?
- Does my policy account for short-term rental activity or extended vacancy?
- How is my roof settled, at replacement cost or actual cash value?
Want guidance first? Compare your coverage. Already know what you need? Get a quote.
Continue the series
You are reading part 14 of How to Compare Homeowners Insurance Quotes Without Getting Burned.
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