Updated: Dec 16, 2020
Here are the top 10 items that you should be looking out for in a typical homeowner’s insurance policy, because a lot of policies do not cover these things and you might need some form of supplemental insurance.
You should look to see if your homeowner's insurance policy covers floods. If you live in an area that has a lot of rain or excessive rain, hurricanes, or rivers that typically overflow, you probably have supplemental insurance for that flooding. Usually homeowners flood policies only cover you when you have something like a burst pipe that burst in your basement and floods out your basement. That is typically what a homeowner’s insurance policies covers for flooding, but if it's a natural disaster, your kind of out of luck, and you'll probably need a supplemental insurance policy.
Do homeowners insurance policies cover earthquakes? If you live in an area where there's active fault lines or lots of earthquake activity, places like California, then you probably don't have earthquake insurance in your policy, or in your typical homeowners insurance policy, you probably have a special insurance policy or you have to buy a supplemental insurance policy that will give kickbacks or discounts for people that upgrade their homes to make them structurally sound against earthquakes. You might want to investigate your own policy to see if it is covered there.
Do homeowners insurance policies cover water leaks? So, if a water leak is coming from, say, a bathroom sink or a pipe that is leaking probably not. But if a pipe suddenly bursts in your basement or something like that, then yes, they will typically cover those kind of leakages that cause water damage due to flooding, but if it's a slow leak or something that could have been preventable that's leaking and nobody notices it for a while and then there's damage, then typically the policy will not cover it but you need to make sure you go back and look through to see exactly what the wording is on your policy.
Does your homeowner’s insurance policy cover mold? It kind of depends on how the mold got into your home. If the mold came from, say, a pipe that burst or say your house was on fire and the firefighters doused it, and then mold grew, then yes, they would probably cover that type of mold. But if you live in an area where there's lots of flooding or high humidity and the mold just grows and it can be prevented because it's an ongoing problem and you should be trying to mitigate it, then typically No. You will then have to get a supplemental insurance to cover mold in your home.
Do homeowners insurance policies cover sewage and drainage backup? If you live in an area that has excessive raining and flooding that could cause the sewer system to flood and it backs up into your home, you are kind of out of luck. Because they do not cover that type of flooding. So, if you do have some kind of a sewer backup you will probably have to be cleaning up and paying for it by yourself. But remember to check with your insurance agent or policy, look over your policy to see if that is actually covered.
Does homeowner’s insurance cover wear and tear? The answer is no because wear and tear usually mean that you are not keeping up with your home maintenance. So, if you have some wear and tear that finally did have a catastrophic outcome than the insurance policies are probably not going to cover that. Make sure that you look and see if that is true in your own policy.
Do homeowner's insurance policies cover you during a renovation? The answer is no. If you are doing a large renovation like popping the top off the home or adding on an addition, then you will need to get supplemental insurance because typical insurance policies do not cover these types of renovations or projects. If you are just doing something cosmetic where you are just updating a couple things you should be okay. So, you will want to check your homeowner's insurance policy. If you have a contractor that is doing the work you want to look into their policy as well, because they do carry policies, but a lot of times they only cover new builds and not renovations. So, you want to make sure that you understand that.
If you live in a historical home in a historical neighborhood, you know that doing any kind of upgrade or cosmetic stuff to your home you have to go through the historical society, to get their approval. Most of the time they typically tell you what you can and cannot do to your home. So, if your home is damaged due to something like a hailstorm then you probably will have to pay for the repairs on your own because typical homeowners insurance will not cover the items that are approved by historical societies. So, if you have a hailstorm that damages your siding, most homeowner’s insurance will cover $9,000 of the cost of typical siding. Normally the siding on a historical home is a special type of siding and is the only kind that is approved by the historical society. So, the historical society will not approve the insurances siding and the insurance will not approve the expensive siding that the historical society says must be used. So, you will likely have to pay the difference between what the homeowner’s insurance will pay and what the historical society will approve. Make sure you understand that in your policy.
Does your homeowner’s insurance cover Acts of war? This is a remarkably interesting topic. So, if the United States, says that we are at war, and your house gets destroyed during the war, you are out of luck, sorry. But acts of terrorism if your house is destroyed or damaged for acts of terrorism, more than likely your homeowner’s insurance will cover that. This something you might want to investigate if you think that could be a possibility.
Number 10 is wildfires. Now, typically wildfires are covered under homeowner’s insurance, but here in Colorado and some of the West Coast cities were having a lot of wildfires lately and they are getting bigger every year and causing more damage. So private insurance companies are having a harder time paying out money to their policyholders. So, I believe in the near future, you will probably have to be getting some kind of supplemental insurance to live up in the gorgeous mountains here in Colorado, but make sure that you really read your policy before you move up into the mountains, because some homeowners insurance companies do not cover wildfires, and you don't want that to be the case if you're living up there during wildfire season.