Know What Isn't Covered by Your Homeowners Insurance Quotes Policy
A. You're not covered if an invading army destroys your house,
but you are covered if your house is either hit by a car or
overrun by a skunk.
Knowledge is your best defense as a
consumer. So, when disaster strikes your home, be it in the
form of an army or your neighborhood skunk, you'll know what
to expect from your homeowners insurance quotes company.
Knowing exactly what your homeowners quotes
policy covers and what is excluded also helps you figure out
if you need to purchase special coverage for the exclusions.
A quick primer on standard homeowners insurance
The first thing to know about exclusions
is that they vary by policy type. An HO-1 covers a half-dozen
perils: fire and lightning, windstorm and hail, explosion, riot,
and civil commotion, damage from vehicles, and theft.
An HO-2 covers those perils, plus six
more: falling objects, weight of ice, snow and sleet, accidental
discharge or overflow of water from the plumbing, sudden and
accidental tearing, cracking, burning, or bulging of a steam
or hot-water heating system, freezing of plumbing, and artificially
generated electrical current.
An HO-3 is often called a "broad-risk
form" because it covers everything except the exclusions outlined
in the policy. According to statistics from the National Association
of Insurance Commissioners, 84.2% of homeowners have an HO-3
policy. The standard HO-3 policy contains a number of exclusions,
- Freezing of pipes in an unoccupied,
vacant, or under-construction building
- Freezing, thawing, pressure, or
weight of water or ice to a fence, pavement, patio, swimming
pool, or dock
- Theft from a building that's under
- Vandalism and malicious mischief
if the building has been vacant for more than 30 days
- Wear and tear on the home including
deterioration, insect and rodent infestation, settling,
cracking, bulging, or expansion of pavement, walls, or foundations,
or damage from domestic animals
- Structures used for a business
- Intentional damage
- Nuclear accident
- Cars, trucks, vans, motorcycles,
aircraft, and boats with anything more than a small motor
- Property belonging to tenants
- Animals, birds, and fish
- Losses resulting from the failure to protect property
after a loss.
What the experts say
We created a list of homeowner situations
ranging from the mundane to the extraordinary and asked insurance
experts if they thought a homeowner would be covered in each
case. Our main sources were Ed Swanstrom, the vice president
of product management at CNA Insurance Group, and Gary Hafner,
director of personal lines/property at the Travelers Insurance
Some common occurrences
A wild animal gets into your house
and wreaks havoc:
Covered. You're covered for this,
as long as the animal is not a rodent, which isn't covered.
You're also not covered if you own the animal that caused the
damage. However, as Hafner points out, if a rodent or a pet
does something that causes a fire, you are covered for the damage
caused by the fire.
Termites, cockroaches, mice, or
rats infest your home:
Not covered. This falls under
the general exclusion of "wear and tear." Insurance companies
don't consider a pest problem to be "sudden and accidental,"
but rather part of routine maintenance around the house. (Sudden
and accidental damage is covered.)
It depends. If your home is damaged
for some reason and you need to upgrade it when you rebuild
or repair, some policies will pay out if you need to upgrade
to meet local building codes. Check your own policy to see if
this applies to you.
It depends. Damage from floodwater
is definitely not covered. For protection against that, you'll
need flood insurance. Water coming into your home from backed-up
sewers is typically excluded, but you can purchase optional
coverage to protect yourself from this.
Your home's value on the real estate
market plummets because a prison or a huge shopping mall is
built on your block:
Not covered. As Swanstrom points
out, "Selling cost has no direct relation to insurance." Your
house is insured for the amount you'll need to rebuild it and
replace the contents.
Power outage coming from outside
Some coverage. Every policy contains
coverage for the loss of food in your refrigerator and freezer,
usually up to $500. Electronics, such as your computer, are
not covered in case there's a surge when the power comes back
on. Both Hafner and Swanstrom say you should get a surge protector
for such occasions.
A company dumps pollutants into
a stream that runs through your property:
Not covered. If something like
this were to occur, the offending company would be stuck with
the clean-up bill -- probably after a lengthy court battle.
(Hafner points out that some policies contain coverage to clean
up oil spilled in your house when your oil company fills your
Lightning strikes a power line
leading into your house:
Covered. This is a basic coverage.
Any damage caused by lightning -- such as fire or damage to
electronics from a surge -- is covered.
An appliance catches fire or your
hot-water heater explodes:
Covered. This is an instance
of what insurance companies call a "sudden and accidental loss."
"You don't know that your toaster is going to cause a fire that
burns your house down," says Swanstrom.
Soot from burning candles covers
your house and your belongings:
Not covered. This is, on the
other hand, according to both Hafner and Swanstrom, the exact
opposite of a sudden and accidental loss. The soot accumulates
on your belongings over a period of time and is not sudden.
Both Hafner and Swanstrom say that the loss is also not accidental
since the homeowner is the one burning the candles that produce
You're running a small business
from your home and a fire destroys your computer equipment:
Not covered. "There are a lot
of entrepreneurs out there, and they need to know that their
home business is not covered under their standard homeowners
policy," explains Swanstrom. "You need to go out and buy special
coverage for your home-based business."
Less common occurrences
A religious phenomena damages your
Covered. Every now and then you'll
hear about something like a house where oil is pouring out of
the walls for no good reason and the Virgin Mary appears in
the oil. If that happens to you, and you make a claim for the
damage done to your walls, you're covered. (Swanstrom mentions
that the insurance company won't take the rap for destroying
the image of the religious figure.)
Planes, trains and automobiles
hit your house:
Covered. Cars and trains fall
under coverage for damage from vehicles hitting your house,
while airplane damage is paid for by coverage for objects falling
out of the sky.
An antigovernment militia violently
takes over your town, destroying your home in the process:
Probably covered. A terrorist
act such as this would almost certainly not fall under the exclusion
for war. But, because no historical precedent exists, both Hafner
and Swanstrom say that judging future circumstances would have
to be done on a case-by-case basis.
A nuclear power plant goes on the
fritz and irradiates your home and all of your possessions:
Not covered. Nuclear accidents
are a standard exclusion. You'd have to go to the power company
that owned the nuclear plant and get it to pay up.
Your house slides down a cliff:
Not covered. If you build or
buy a house on a cliff, hopefully you are aware of the risks
involved. Your standard homeowners policy won't pay if your
house slides down because of a landslide or any other reason.
Your best bet is to go check with your agent about getting coverage
from surplus-lines insurers. (If you live in California, be
aware that your California Earthquake Authority policy will
cover earth movement only if it is seismically induced, so if
you live on a cliff overlooking the Pacific, you, too, will
need coverage from a surplus carrier.)
Your house is swallowed by a sinkhole
because it was built over an old coal mine:
Not covered. This is a problem
for homeowners in the Coal Belt states, including Illinois,
Ohio, Pennsylvania, and West Virginia. While your homeowners
policy doesn't cover this, you can purchase coverage (known
as mine subsidence insurance), usually from your state's Mine
Subsidence Authority. Check with your state's department of
insurance or your agent.
A meteorite plummets to Earth and
lands in your family room:
Covered. Not all meteorites are
going to be big enough to destroy humankind as we know it. So,
fortunately, there is coverage for this. This, like an airplane
hitting your house, is in the category of objects falling from
the sky. Additionally, if part of the Mir space station hits
your house, you're covered!
Check that policy
Hafner and Swanstrom both emphasize
that the most important way to educate yourself is to read your
policy. If you come across something you don't understand, ask
your agent or insurance company questions.