8 Surprising Things Your Home Insurance Won’t Cover – Part One

Estate planning is all about protecting you, your loved ones, and your hard-earned assets.  The following is Part One of a two-part article about home insurance
and what is usually covered, and what is not. I found it online at Kiplinger on 9/10/26. Alexandra Twin wrote it, with contributions from Rachael Green. For most people, their home is the most valuable asset. And when it comes to home insurance, you should
never assume you’re covered for what may happen. Read on and check your policy just to be safe and prepared. I’ll post Part Two next week.

“The only thing more frustrating than an unexpected home repair is finding out it’s not actually covered by your insurance. Here’s what you need to know to be prepared.

Buying home insurance is supposed to mean you’re covered when disaster strikes — and in many ways, it does. But there are some surprising exclusions in standard policies that could leave your home exposed to uncovered damage.

If you live in a flood-prone area, for example, you might need to double-check your coverage and buy additional flood insurance to cover the gaps. Such natural disasters typically aren’t covered by standard home insurance. Yet,
the number of homes with flood insurance in the United States is just 4%.

There are a number of potential damages or liabilities that a standard home insurance policy doesn’t protect you. Here are some of the most common ones that are excluded, even if they sound like they would be covered.

1. Flood damage

A standard home insurance policy does not cover damage from a flood. This exclusion is tricky because it includes water damage that occurs during a hurricane or other storm, but is deemed flood-related rather than wind or rain-related.

If your home is located in a special flood hazard area (SFHA), your mortgage lender will likely require you to purchase flood insurance from the federal governments National Flood Insurance Program or from a private insurer.

Even if you aren’t in a flood zone or aren’t required to get flood insurance, it’s still good to have it. Flooding is involved in 90% of natural disasters in the U.S. Even if the natural disaster is covered by your standard
policy, any flooding related to it won’t be.

Flood insurance typically costs an average of about $888 per year, according to a Policy Genius report. But premiums vary depending on your property’s elevation and other flood risk factors. You can get price quotes at FloodSmart.gov.

2. Earthquakes, landslides and sinkholes

As surprising as it sounds, home insurance doesn’t cover damage that results from land movements, including earthquakes, landslides or sinkholes.

For those who live in areas where any of these are a real risk, additional earthquake insurance is recommended. That’s particularly true for people who live in California, Washington and Missouri, the top three earthquake markets
in the country, as identified by the Federal Emergency Management Agency (FEMA).

Californians can purchase a policy through the California Earthquake Authority.

It is also possible to purchase an additional policy or add coverage for landslides or sinkholes if you’re at risk.

3. Water leaks are only covered in some situations

Home insurance does cover damage resulting from water leaks, but only when the leak is sudden or accidental, such as if a pipe burst.

Insurance does not cover damage from leaks that are a result of poor maintenance on the part of the homeowner; for example, if a homeowner fails to remedy a slow leak that causes damage over time.

To prevent being denied coverage for a water leak, check your roof and plumbing regularly for damage — especially after a storm or natural disaster. You want to catch every sudden or accidental break when it happens so you can
make a prompt claim if necessary. If you don’t notice a leak until months later and make a claim at that point, your insurer might decide it’s the result of poor maintenance.

4. Mold coverage is tricky

Mold is not usually covered by a home insurance policy unless you can prove it has sprung up as a result of a “covered peril,” such as a water heater bursting or wind-driven rain. Say a hurricane rips a hole in your roof, causing
rainwater to soak through your ceiling and walls. If mold grows in that area, insurance will likely cover it.

However, if the cause of the mold is a flood or other excluded disaster, you’re on your own. Mold is also not covered if it was caused by neglect, such as, say, failing to deal with a leaking pipe under the kitchen sink for
months, which results in mold growth.

Even if the mold is caused by a “covered peril,” you still need to take proactive steps to prevent mold from growing to improve your odds of getting the mold claim approved.

If a pipe bursts, for example, you need to shut off water to your house, take photos of the damage, then dry the area as quickly as you can. If your insurer determines that you didn’t make every reasonable effort to prevent
mold, your mold claim might be denied even if other damage is covered.

When that happens, you can look into umbrella insurance to fill in the gaps. Umbrella insurance provides additional liability coverage to make sure your finances will be fully shielded in any lawsuit.

As your net worth grows, deciding how much liability coverage you need can become part of a larger financial planning conversation. A financial adviser can help you assess your assets, identify potential gaps in your financial
plan and consider strategies to help protect the wealth you’ve built.”

Having your affairs in order includes not just having an estate plan but making sure you have sufficient insurance for what is likely your most valuable asset,
your home. Like your estate plan, which should be reviewed periodically (my clients enjoy complimentary estate plan reviews with me every three years), you should review your policy periodically as well.

 

Please call me if you would like to discuss your estate planning needs; I would be honored to help you protect your loved ones and your hard-earned assets. You
can reach me at 513-399-7526 or visit my website, www.davidlefton.com.
And check back next week for Part Two of this article!

 

Source: Kiplinger on 9/10/26. Alexandra Twin author, contributions from Rachael Green