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8 Things Homeowners Insurance Does Not Cover

  • Corey
  • Oct 24, 2016

1. Earthquake and water damage: Landslides, sinkholes, and earthquakes are not covered by standard insurance policies. Earthquake insurance can be amended to current plans or separately bought in all states except California. Flood insurance is available only as a separate policy, and can only be purchased through a government national flood insurance program run by FEMA.

2. Damage to your property due to neglect: These damages include insect, rust, rot, general wear and tear, and rodent damage. Furthermore, if there is a damage caused by a power outage, your policy may not cover the costs, such as if your sump pump were to fail.

3. Personal injury liability: Although many standard home insurance policies do provide some form of liability coverage, some do not. Personal injury liability covers costs up to a determined amount for those injured on your property; injuries can range from slipping on ice to being hit by a falling branch. Depending on the climate and natural features on the property, having personal injury liability may be necessary.

4. Simultaneous events: Also known as the Anti-Concurrent Causation Clause (ACCC), is a clause that is used when your property suffers damage by two simultaneous events and one of the events is not covered under your insurance policy. For example, if there was both wind and water damage on your property you may not be entitled to a payout even if your coverage includes wind damage, because you do not have water damage coverage in your policy (majority of people do not). If this is the case, the ACCC means your insurer does not have to pay for any damages.

5. Lost wages: in the case your home is severely damaged, it may take weeks or even months to repair. So while homeowners insurance will cover temporary living accommodations, if you have to take time off work to salvage personal belongings or do any sort of property repair, you will not be reimbursed for loss of income.

6. Complete rebuild costs: Having coverage is one thing, but adequate coverage is another. When insuring your home, make sure to have an accurate estimation of the costs to replace your home completely. Also be sure to update this figure every few years as material and labor costs can change. An alternative is insuring your home for market value, but then you have no control in determining the amount you receive.

7. Pipe repair/replacement: It’s a nightmare for those living in cold climates, because repairing/replacing pipes is quite expensive and not covered by your policy. This is because broken pipes are seen as negligence rather than an accident.

8. Required upgrades: Building codes frequently change, and costly to upgrade in an existing build. When you are claiming damage on your home, your policy will cover the cost to repair or even replace your home in its current condition, so any upgrades your municipality requires will not be covered. If you are concerned about this, you can purchase ordinance and law coverage.

In all cases, homeowners insurance policies are different and vary from state to state. Talk to an expert advisor today to learn more about your options and how you can boost your coverage.

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