Home insurance is for anyone who is interested in financial security, peace of mind, and safeguarding their home and belongings. It’s also required by many mortgage lenders. Home insurance covers many different scenarios and causes of damage but the extent of your coverage depends on your insurance company and your coverage options. As a homeowner, you should be aware of what is and what isn’t covered by your home insurance. Even the most comprehensive coverage may require separate endorsements (add-ons) to protect you from certain perils like earthquakes and water damage. Common scenarios not covered by basic home insurance include:
While some of these perils can be protected against with an endorsement (add-on coverage) some of these scenarios are not covered by most home insurance companies. Why aren’t these covered? They’re usually prevented by good home maintenance or they are considered too risky for the insurance companies. We’ll review each of these items in detail to help you understand your home insurance a little better.
Water damage is not generally covered under your typical basic home insurance policy, although some insurers are offering this as part of a comprehensive home insurance package. Most insurance companies offer flood insurance as an endorsement or add-on coverage. This optional supplementary insurance extends your protection to include overland water and sewer back up damage. This includes water damaged caused by bodies of water overflowing, rainfall, snowmelt, and backup of liquid from your drains into your home. Sewer backup coverage can often be purchased separately without the overland water portion, too.
It’s important to note that “flooding” damages caused by something like a burst pipe or malfunctioning washing machine may be covered by your normal home insurance policy. Other sources of water damage, such as a tsunami or seepage from groundwater, may not be covered at all. Exactly what’s covered will vary by the insurance company, so be sure to talk to your broker to understand your home insurance coverage.
Any damages caused to your home which can be written off as wear and tear will not be covered by your home insurance policy. This is because your coverage is intended to safeguard your house from sudden catastrophic losses such as fires and major storm damage. You, as the homeowner, are held responsible for performing rudimentary upkeep to protect your home.
Like with wear and tear, you as the homeowner are held accountable for the general maintenance of your home. Mould typically results from negligence following water damage or a home that wasn’t properly repaired afterwards. As mould is preventable and slow-moving, you are expected to notice and repair it. Proper restoration after water damage is critical!
In a situation where armed municipal, provincial or national officers or the army needed to breach your home, your insurance policy will not compensate you for any damages incurred. This is because any perils caused by a public authority is not generally included in your coverage. You may also not be reimbursed if any authorities had to seize your personal belongings, take over your land or commandeer your home.
Whether it is bedbugs, termites, mice or any other sort of vermin, you will most likely not be reimbursed for the damages caused by the infestation of these creatures. Technically, infestations are made worse by a buildup over time, and most insurance companies consider the removal of vermin and upkeep of your home a part of general maintenance.
Should you live near a nuclear power plant, your home insurance is fairly likely not to extend to any damages induced by a nuclear accident. Unfortunately, most insurers do not offer add-on coverage that will extend your protection to this kind of incident. Nuclear power plant companies are often obligated to supply liability insurance in order to compensate for damages as long as you live within the area of risk.
Any damages induced by the shifting of the earth underneath your home are not usually covered by your home insurance policy. This includes earthquakes, sinkholes and mudflows. However, there are additional coverage options that will cover this kind of damage. This only refers to damages directly caused by the earthquake itself, and earthquake insurance often has a higher deductible than regular insurance. Nevertheless, it is recommended that homeowners who live in earthquake-prone areas have this coverage in case of an incident.
Dog bites comprise over one-third of home insurance liability claims, so it may not be a surprise to learn that not every dog breed is covered by your typical home insurance policy. Breeds which are known for having aggressive tendencies or have been otherwise branded as dangerous may be left out of a policy. Some insurance companies might request additional information about your pet to assess whether or not there is a history of aggression or a higher risk of a dog attack. Your broker will be able to determine whether or not your dog’s breed affects your insurance – this isn’t the case for all insurers!
Understanding your policy will help set you up for financial security and peace of mind when it comes to protecting your home. Knowing what your policy does and doesn’t cover is critical. Your broker is an excellent resource for all of your questions and to help you interpret all of the insurance lingo. Contact us today with your questions!