What a standard policy leaves out
Four exclusions account for most of the claims people expect to be covered and are not.
Exclusions are not fine print in the pejorative sense. They are how the product is defined, and most of them have a separate solution available.
The problem is timing: people generally read the exclusions after a loss rather than before one, and by then the separate solution is no longer available to buy.
Flood
Standard homeowners policies exclude flood. This is the single most consequential exclusion in the product, and it surprises people every year.
Flood coverage is available separately, most commonly through the National Flood Insurance Program, a federal programme administered by FEMA, and in some cases through private insurers. Where a property sits in a Special Flood Hazard Area and carries a federally backed mortgage, flood cover is generally mandatory under federal law rather than optional.
Water damage from inside the home — a burst pipe, for example — is a different question from flood and is often covered. The distinction is where the water came from.
Earth movement
Earthquake, landslide, sinkhole and general subsidence are typically excluded. As with flood, coverage is often available as a separate policy or an endorsement.
Whether it is worth buying depends entirely on where the property is, which is a conversation to have with an insurer who knows the area rather than a decision to make from a general page.
Wear, maintenance and gradual damage
Insurance covers sudden and accidental events. It does not cover deterioration, and the line between the two is where a large share of disputed claims sit.
A pipe that bursts is generally a claim. A pipe that has been seeping behind a wall for two years generally is not, because the damage accumulated rather than happened. Documentation of maintenance helps considerably here.
The ones worth reading on your own policy
- Mould, which is frequently sub-limited rather than excluded outright
- Sewer and drain backup, commonly an inexpensive endorsement rather than standard
- Damage caused by pests, vermin or insects
- Loss to a home left unoccupied beyond a stated period
- Business property or business activity conducted at the address
Common questions
Water entering from outside at ground level and water escaping from a system inside the home are treated differently. The second is often covered under a standard policy; the first generally requires separate flood coverage.
Some can be addressed by endorsement or by a separate policy — flood, earthquake and sewer backup are the common examples. Others, such as wear and maintenance, are structural to how insurance works and cannot be bought back.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.