In the aftermath of Superstorm Sandy, nearly everyone learned one important fact: Standard homeowners insurance typically does not cover flooding. You need a separate policy for that. But most people do not know some of the other situations in which home insurance does not provide coverage. Following are some of the personal property exclusions, but not necessarily all of them, from standard homeowners insurance:
It’s just business … or at least partly business
Structures used for business aren’t covered by standard homeowners insurance. In fact, any claim related to a business on your property could be denied. Take note of this if you run an informal day care or make jewelry or operate a catering business in your residence.
Things that fly, purr or bark … and other things that fly
Injuries to or theft of pets is not covered in standard policies. However, injuries caused by your pet are covered. If your dog bites someone, for example, and the injured person decides to sue, your personal liability insurance would cover you. However, you might need extra coverage for certain dog breeds, so let your agent know what kind of dog you own.
Birds aren’t the only flying things that aren’t covered. Personal aircraft stored on your property also are not covered if they are stolen or damaged.
Inaction is never the right reaction
Losses caused because you failed to protect your property and prevent further damage typically are not covered. What does this mean? If you have a fire and don’t call firefighters, don’t count on being reimbursed for your losses. If a tree damages your roof and you don’t to protect your stuff from rain damage afterward, you might not get help, either.
Don’t attempt a power play
This isn’t hockey. There’s no such thing as a power play on homeowners insurance. That means you can’t file a claim based on losses caused by an outage of electricity – say, if your frozen food thaws and is ruined because of an outage.
Down to the waterline
You know you’re not covered for floods – technically called damage due to rising waters. But you’re also not covered for water backup. Say a drain or a sewer backs up or a sump pump in your basement fails. Unless you’ve scheduled an endorsement, you could face thousands in damage.
Renters can’t be choosers
If you lease space in your home or even just have a boarder who isn’t related you, his or her property is not covered by your homeowners insurance. The renter or boarder will need separate coverage in the event your home is affected by fire or another covered peril and their possessions are damaged.
The earth moves, but your policy won’t
Similar to floods, earthquakes aren’t covered by standard homeowners insurance. That means if you live in an area prone to earthquakes, you need earthquake insurance. About 5,000 earthquakes occur in the U.S. each year, and experts say 90% of the country’s population lives in a place that’s seismically active. Sinkholes and mudslides also typically aren’t covered by home insurance.
The takeaway from all this: Study your policy carefully to know what’s covered and what isn’t. More importantly, shop your coverage and ask your agent about the exclusions in each policy you consider. Only by knowing what you have can you know what you might need.