What Home Insurance Policies Don't Include

Homeowners insurance policies are designed to protect your home and personal belongings from most types of damage, but there are some common disasters and liabilities that aren't covered. Damage or loss due to floods, earthquakes, pest infestations, mold, and normal wear and tear are excluded from standard home insurance policies. Home insurance also does not cover valuable jewelry, works of art or other collectibles, protection against identity theft, or damage caused by an earthquake or flood. To understand what home insurance doesn't cover, it's important to look at the “exclusions” section of your policy form.

Flood damage is one of the most expensive events not covered by a home insurance policy. Home insurance also won't cover damage caused by natural floods, rain, clogs in sewer pipes or sump pumps, or water that seeps from the ground and damages the foundation of the house. The fact that your home insurance covers damage caused by mold is a bit complicated, since it all depends on the root cause of the mold problem. In general, if mold is due to prolonged leaks, poor home maintenance, or natural flooding, your home insurance probably won't cover it. Home insurance also won't cover damage associated with earthquakes or sinks.

If you're using a service like Airbnb or HomeAway to rent your home for extra money, make sure you understand your insurance options. Home sharing is considered a “commercial use” of your home, and your home insurance policy won't pay the bill if a mishap occurs while you rent your home. If you're running a business from home, the business and its inventory won't be covered by home insurance. Other items not covered by home insurance include meteorite falls and riots, property damage caused by guests at a party, problems under an “ordinance” or “law” if a building inspector requires you to stop a renovation or start over, water damage caused by natural floods or rain, and damage caused by spray-painting. It's important to note that while insurance exclusions are often viewed in a negative light, they actually allow insurers to offer the broadest possible coverage.

This means that your home will be protected from basically everything except for the specific causes of damage or loss listed in your policy.