Think your home insurance policy covers every mishap that can come your way? Keep thinking, friends.
The exact instances that are and aren't covered by typical home insurance depend entirely on the details of your policyâand, contrary to what you may think, each policy is quite different.
"Insurance policies are like snowflakes; no two are exactly the same," says Ashleigh Cloud Trent, an insurance adviser with Swingle Collins and Associates in Dallas. So if you want to know if the odoriferous damage caused by a demented skunk in your kitchen is covered, go read the fine print.
You donât want to be caught off guard. Most standard policies exclude certain things that homeowners might assume are actually covered. Don't bank on your insurance company footing the bill for the following unfortunate situations.
1. Home renovations
A lot of homeowners don't realize they need to take out a specific renovation policy if they're doing major work, even if the contractor has a builder's risk policy.
According to Trent, the builder's risk policy covers only new construction, not the existing structure.
"It's OK if you're just doing cosmetic updates; but if you're taking the roof off, that's more than a standard homeowners policy is designed to protect," she says.
Even if the house is a tear-down, a renovation policy will cover any liability issues for people who wander onto the property and get hurt.
"If someone gets hurt on the property, you're liable," she explains. "If neighborhood kids are playing around in the empty house, that's your liability."
2. Earthquake damage
If you live on a major fault line, it's probably wise to invest in earthquake insurance since it's not usually included in homeowners coverageâeven in the places that need it the most (e.g., California and the Pacific Northwest). If a quake strikes and you don't have this specific policy, you'll be liable for paying for repairs to your property on your own.
3. Slow leaks
Damaged caused by slow leaksâtechnically "seepage and leakage"âcan be denied coverage. Water damage has to be "sudden and accidental," explains Trent.
"A prime example is a client whose contractor nicked a pipe behind a wall. The pipe was connected to a seldom-used guest bathroom, so nobody noticed the leak,â Trent recalls. âWhen they rented out the home years later, the tenants called a few months later to report that the floorboards were warping."
The slow leak cased $25,000 in damageâand the homeowners insurance didn't pay out a nickel.
What if the earth opens up and swallows your house whole? Itâs totally not covered.
"Sinkholes are not covered under the normal home insurance. You would need to add additional coverage for earthquake and/or earth movement," says John Espenschied, agency principal at InsuranceBrokersGroup.com. Sorry, Floridians.
5. Sewer and drain backups
If the sewer backs up and fills your house with raw sewage, you might have to clean up the mess yourselfâand on your own dime.
"In a lot of places, when there's serious rain, the sewers and drains can back up into people's homes," says Trent. "Not all policies will cover that."
6. Meth labs that you had no idea were there
What if you unknowingly rent an apartment to the next Walter White? Thatâs too bad, says Rachel Munoz Florido of JnR Insurance.
"[Our] client's rental home exploded from a tenant's meth lab,â Florido says. âThis was not covered at all due to the exclusion for illegal activity and pollution exposure." (And this, dear readers, is why you have to screen your tenants.)
7. Acts of war
"If the U.S. government determines we are at war and your home is destroyed as a result of the war, you will not be covered," explains Espenschied. Destruction from acts of terrorism, however, is generally covered.
8. Keeping the historical society happy
If you live in a landmark area and you need permission from the historical society to make changes to your home, there might be a cap on how much your insurance will pay to fix a problem. And the historical society might dictate the material you use on your home, no matter how expensive it is.
"A hailstorm decimated all of these historic homes in Dallas recently," says Trent. "What should have been a $9,000 vinyl siding repair ended up costing homeowners $90,000 because the historical society insisted they useâ a specific type of shingle. A typical policy would not have made up that difference.
9. Smell damage
Smells that stick around your home and possessions aren't covered by most policies.
"We had a client in the process of renovating a home who put all of their belongings in a storage unit that happened to be right next to a restaurant," says Trent. "When he went to get his things back, all his possessions, including his mattress, permanently smelled like curry."
With a typical insurance policy, you'd be stuck replacing everything yourself or sleeping on a food-smelling bed.