5 Things Your homeowner insurance policy probably does not cover
Most homeowners assume their insurance policy covers everything that could go wrong with their home. The reality is very different. Standard homeowner policies have specific exclusions that catch people off guard — usually at the worst possible moment. Here are five common gaps you need to know about.
1. Flood Damage
Standard homeowner insurance does not cover flood damage. This includes flooding from heavy rain, storm surge, overflowing rivers, and even neighborhood drainage failures. If your home floods, you are on your own unless you have a separate flood insurance policy through the National Flood Insurance Program or a private insurer. Many homeowners discover this only after filing a claim.
2. Sewer and drain backup
If a sewer line backs up into your basement or a drain overflows and damages your home, most standard policies will not cover it. Sewer backup coverage is typically available as an add-on endorsement for a small additional premium — but you have to ask for it specifically.
3. Home business equipment and liability
If you run a business from home, your homeowner policy likely provides little to no protection for business equipment, inventory, or liability related to that business. A client who visits your home office and gets injured may not be covered under your standard policy. A separate home-based business policy or endorsement is usually required.
4. high-value jewelry, art and collectibles
Most homeowner policies cap personal property coverage for jewelry, fine art, and collectibles at a relatively low dollar amount — often $1,500 or less for jewelry. If you own items worth significantly more, you need a scheduled personal property endorsement that specifically lists and covers those items at their full appraised value.
5. earthquake damage
Earthquake damage is excluded from virtually all standard homeowner policies. If you live in an area with any seismic activity — and that includes more of the country than most people realize — you need a separate earthquake policy. California is the obvious example, but states like Oklahoma, Washington, and South Carolina also carry meaningful earthquake risk.
do you know where your coverage stands?
These five gaps are just the beginning. The only way to know if your policy is protecting you is to actually review it. TARC’s free Coverage Score tool takes 60 seconds and shows you exactly where your coverage may be falling short.