Homeowners insurance is an extremely important purchase for anyone who is buying a house or who already owns one. When a home buyer gets a loan to purchase a property, the lender requires insurance — the lender wants to make sure there’s money available if the home is destroyed. Even those who pay cash or own their homes free and clear should get coverage.
But while homeowners insurance will pay for a lot of things that could go wrong with a property — like a fire or vandalism — there are certain situations when a policy will provide no help at all. It’s important to understand these limitations to avoid unpleasant surprises when something goes wrong.
Here are a few things that homeowners should not be surprised to find their home insurance doesn’t cover.
1. Flood damage
Flooding caused by a busted washing machine should be covered by standard homeowners insurance. But any flood damage caused by weather or natural disasters won’t be covered.
Standard homeowners insurance policies do not pay for floods caused by so-called “acts of God.” Homeowners would be on their own if a hurricane or even a bad rainstorm caused damage to their personal property.
It is possible to buy separate flood insurance coverage, though. And those who live in designated flood zones — areas the Federal Emergency Management Agency (FEMA) has determined are at an elevated risk of taking in water — may be required by their mortgage lender to get covered.
Anyone who is in a flood zone, whether they have a mortgage or not, needs to get a policy in place ASAP. Water can do a ton of damage and no one wants to be left paying to pick up the pieces on their own. Flood insurance can be purchased through the National Flood Insurance Program overseen by FEMA. Homeowners should look into getting covered now if they are at risk of flooding and don’t have protections in place.
2. Routine wear and tear
Houses are lived in, and a lot of things can happen to them over time (just a quick look at my kitchen cabinets with two kids and my hardwood floors with two dogs demonstrates that). Unfortunately, home insurance doesn’t cover routine wear and tear (or the stress a toddler places on a home).
Just like a car insurance policy won’t pay for gas or new brakes, a homeowners policy won’t pay for things like a new air conditioner, appliances that need fixing, or new carpet. Unless those things are destroyed by a covered disaster — like a furnace fire or a fridge water line that leaks — homeowners will have to pay on their own for the stuff that simply gets old or broken.
3. Mold damage
Mold damage typically happens over time when other problems aren’t fixed — like a leaky roof or pipes, or a faucet that drips, or an area with too much moisture and too little ventilation. Homeowners insurance is not generally going to pay anything for mold remediation even though it can be expensive, coming in anywhere from $1,500 to $9,000 in most cases.
4. Damage from pests
Finally, damage from pests like mice or termites or other insects or vermin is also not going to be paid for by homeowners insurance coverage. Property owners need to know the signs of damage and, potentially, to have regular inspections by a pest control professional to avoid things going wrong.
It’s important to understand what home insurance won’t cover, before it’s needed and unavailable. Homeowners can ask their insurer or look at their policy language to see where the gaps in coverage are and either buy standalone policies or start saving in a home repair and maintenance fund in case a problem happens that they’ll have to pay for themselves.
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