4 Surprising Things Your Home Insurance Policy Might Not Cover

30 March 2016 by Elijah Steward

Homeowners insurance is one of those things you pay for but hope you never have to use. Unfortunately, it's usually not until a homeowner needs to use their insurance policy that they realize the coverage they had might not have been enough. In fact, there are some surprising things that you would probably expect your home insurance policy to cover but be surprised to learn otherwise.

Flood Damage

While many forms of water damage usually are covered by home insurance (such as that caused by a burst pipe), flood damage is considered a completely separate situation. Water damage caused by flooding (natural disaster) is typically not covered by standard home insurance and instead must be insured against with separate flood coverage. This is a common add-on for those who live in known flood plains.

Earthquake Damage

Another natural disaster that your home insurance policy may not protect against is damage from an earthquake. If you live in an area where earthquakes are common (such as along a fault line), your insurance agent will likely recommend that you purchase earthquake coverage so that you are protected. But if you live in an area where earthquakes aren't common and one occurs, you could be left to pay for the repairs yourself.

Total Rebuilds

Often times, a standard home insurance policy only covers the cost of the home's current appraised value. Unfortunately, this means that if your home is destroyed and needs to be completely rebuilt (such as after a fire), your reimbursement from the insurance company likely won't cover the cost of a total rebuild from the ground up, as construction expenses can add a lot to the price.

Mandated Updates

As years progress, residential coding laws and requirements change quite often. These changes typically aren't covered by your home insurance policy. For example, if you find out your home's electrical wiring is outdated, your insurance company will not likely pay for the cost of the upgrade. Instead, you'll be left to pay for these expenses out-of-pocket in most cases. There is additional coverage you may be able to purchase to protect against this, so check with your insurance company if you're interested. This is often recommended if you own an older home that hasn't been inspected recently.

By being aware of what's covered and possibly not covered by your standard home insurance policy, you can plan accordingly and avoid unwelcome surprises. Talk with an insurance provider like McHugh Insurance for more information.

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