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A standard homeowners policy (the HO-3 form most people have) covers a long list of perils: fire, wind, hail, theft, and sudden plumbing failures among them. The surprise for most homeowners is not what is covered. It is the exclusions, the things the policy explicitly does not pay for.
If you only remember one list about your policy, make it this one. For the covered side, our plain-English coverage guide walks through it.
Flood damage
This is the biggest gap in American homeowners insurance. Rising water from outside the home, storm surge, overflowing rivers, heavy rain that pools and floods, is not covered by a standard policy. About a quarter of flood claims come from outside high-risk flood zones. Coverage comes from a separate flood policy, usually through FEMA’s National Flood Insurance Program or a private flood insurer. Here is how homeowners and flood coverage interact.
Earthquakes and sinkholes
Earth movement is excluded in almost every state. That means earthquakes, landslides, and sinkholes are not covered without a separate endorsement or policy. In California and other seismic states, earthquake coverage is usually bought as an add-on with its own deductible.
Wear, tear, and neglect
Insurance covers sudden and accidental damage, not deterioration. A roof that fails at 25 years old because shingles wore out is not a covered loss. Neither is mold that grew because a slow leak went unfixed for months, nor damage from pests. Regular maintenance is the homeowner’s job, and insurers treat it that way at claim time.
Water damage, but not all of it
Sudden pipe bursts are typically covered. Sewer backups usually are not, unless you added a sewer-backup endorsement. And gradual seepage is excluded. This distinction trips people up constantly: what counts as covered water damage depends on where the water came from and how fast.
Mold, beyond small limits
Most policies cap mold coverage at a few thousand dollars and only when the mold results from a covered peril, like a burst pipe. Long-term mold from humidity or neglected leaks is excluded.
Intentional damage and fraud
Damage you cause on purpose is not covered, and neither is damage caused by fraud. War, nuclear incidents, and government seizure are also standard exclusions.
Business activity at home
Running a business from home can create a gap. Standard policies limit coverage for business equipment and exclude business liability. A home-based business usually needs an endorsement or a separate business policy.
Certain dog breeds and trampolines
Some insurers exclude liability for specific dog breeds or for injuries involving trampolines, pools without fences, and other “attractive nuisances.” This varies by company, so it is worth asking directly.
High-value items above sublimits
Jewelry, art, cash, and collectibles are covered only up to small sublimits, often $1,000 to $2,500 per category. If you own an engagement ring worth more than the sublimit, it needs a scheduled personal property endorsement.
Ordinance and code upgrades
When a damaged home must be rebuilt to current building codes, the extra cost of the upgrades is not covered by default. An ordinance-or-law endorsement, usually cheap, covers the difference.
What to do about the gaps
Read your declarations page and the exclusions section, not just the marketing summary. Flood and sewer-backup endorsements are the two most commonly skipped and most commonly regretted. Schedule anything valuable. And if you run a business from home, tell your insurer; finding out at claim time is the expensive version.
