What Homeowners Insurance Does Not Cover

Q. What about floods, earthquakes and other catastrophes?

A. Many homeowners policies cover damage caused by "just about anything," unless specifically excluded. Most catastrophes are covered. For example, wind damage from hurricanes or tornadoes is covered as a windstorm peril.

But, flood damage and earthquake damage are NOT covered by a standard homeowners policy. A separate policy is required.

Q. Why aren't floods and earthquakes covered by my homeowners policy?

A. Flood and earthquake activity is more widespread than many people realize. Nine out of ten Americans live in seismically active areas. Since 1900, earthquakes have occurred in 39 states and caused damage in all 50. And if your home is located in a flood-prone area, you are 26 times more likely to suffer flood damage than fire damage.

You may want to check with your agent about special catastrophic policies for normally excluded conditions like floods and earthquakes.

Q. Are there any other exclusion I should know about?

A. There may be other exclusions spelled out in your policy such as neglect, intentional loss, "earth movement (landslide)", general power failure and even damage caused by war. If you neglect to take care of your property (i.e., a leaky roof), you may not be covered. Obviously, if you intentionally lose an object or damage your property, there is no coverage.

One other exclusion that can be costly is the "Ordinance or Law" exclusion. Building codes that drive up the cost of rebuilding or repairing may not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher-grade or more expensive materials than the original ones being replaced, the new materials may not be covered for the full price.

For example, if you must replace all the wiring in your home following a fire, and the current building code in your area requires a higher grade of electrical wiring, your policy may cover only the cost of replacing the older wiring. The difference in cost between the old wiring and the new wiring required by ordinance or law is your responsibility.

Laws and building codes are constantly being updated. Coverage to include ordinance or law requirements can be added to your homeowners policy with an endorsement-an addition that could save you money in the long run.