What Is Not Covered by Homeowners Insurance?

Purchasing homeowners insurance is a relatively affordable way to protect what is likely your biggest investment. However, it’s crucial to understand what it does and doesn’t cover before you buy. Standard homeowners insurance policies usually don’t cover the following:

• Earthquakes, Floods, Sinkholes, and Landslides: These risks are typically limited to certain parts of the country, so they aren’t covered by standard home insurance.
• Sewer Backups, Septic Tank Backups, Drain Backups, or Sump Pump Failures: Home insurance covers many types of water damage, but not from these sources.
• Wear and Tear: Replacing or repairing aging home systems isn’t covered; you’re expected to maintain those on your own.
• Animal and Insect Damage: Damage from animals or insects, such as rodents or termites, is usually not covered.
• Dog Attacks: If your dog is considered dangerous or has previously bitten someone, insurers may require a liability waiver or refuse to insure you.

What Is Covered Under a Homeowners Insurance Policy?

A standard homeowners insurance policy generally includes four types of coverage:

• Dwelling or Structure Coverage: Pays to repair or rebuild the physical structure of your home if it’s damaged or destroyed by fire, smoke, hail, lightning, vandalism, theft, wind, or another covered event.
• Personal Property Coverage: Pays to repair or replace personal possessions such as furniture, appliances, and clothing stolen or damaged in a covered incident.
• Liability Coverage: Pays medical and legal costs if a visitor is injured at your home and sues you.
• Additional Living Expenses (ALE) Coverage: Helps pay the cost of living elsewhere while your home is repaired or rebuilt.

Homeowners Insurance Add-Ons

Since there are some things home insurance doesn’t cover, consider the following homeowners insurance add-ons to fully protect your home:

• Flood Insurance: Use the Federal Emergency Management Administration (FEMA) flood map to check your home’s flood risk. Flood insurance can be a smart investment to safeguard your home.
• Earthquake Insurance: Covers your home’s structure, personal property, loss of use, and the cost of rebuilding your home to comply with current building codes.
• Sinkhole Insurance: Insurance companies in some states are required to offer sinkhole insurance, either as an endorsement to standard homeowners insurance or as a stand-alone policy.
• Water Backup Insurance: Pays for damage due to water backing up into your home from a drain, sewer, or sump pump failure.

How to Save Money on Home Insurance

Nationwide, homeowners insurance costs an average of $1,411 annually. Fortunately, there are plenty of ways to save:

• Raise Your Deductible: Increasing your deductible typically lowers your premiums; just be sure you can afford the higher deductible if you have a claim.
• Shop Around: Get quotes for the same type and amount of home insurance from several insurance carriers and compare them to your current costs.
• Search for Discounts: Insurance companies may offer discounts for members of certain organizations, buying more than one type of insurance policy, paying annual premiums in full, purchasing insurance online, or setting up autopayments.
• Safeguard Your Home: Home improvements that reduce risk can translate to lower insurance premiums.
• Improve Your Credit Score: Insurance companies typically charge lower premiums for those with higher credit-based insurance scores.

The Bottom Line

When you own a home, it’s important to budget for recurring expenses such as routine home maintenance, property taxes, and homeowners insurance. Shopping around for home insurance, looking for discounts, and maintaining good credit can help you save money on home insurance so you can afford the protection your home needs.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is ready to assist you with all your mortgage requirements.