8 home issues your insurer doesn’t cover

June 20, 2011

You won’t believe this, but my house was hit by lightning — twice.

I know this isn’t supposed to happen. Fortunately nobody was hurt and the house didn’t burn down. Yet I think a deity (maybe Thor or Zeus) was reminding me to check my insurance coverage and install lightning rods.

Checking your homeowner’s insurance is a matter of seeing 1) what they won’t cover and 2) your out-of-pocket expenses, based on your deductibles.

Since I carry a $1,000 deductible on my homeowner’s policy, which reduces my premium, I know anything under that threshold is on me.

It could have been worse. In the case of my dual lightning strikes, I only had to pay to replace (2) circuit boards from my garage-door opener, a sump pump and computer board in my stove. Those expenses totaled about $900. The garage-door opener repair service generously offered to send in a claim directly to my insurer, which was helpful, but it still wouldn’t exceed the threshold of my deductible.

I discovered in researching this subject that even if my lightning-related expenses had exceeded $1,000, my insurer may not have reimbursed me anyway since power-surge damages typically aren’t covered. I had bought a cheap surge protector to protect my garage door opener, which didn’t do much good against a million volts. (I noticed in the hardware store, though, that more expensive surge strips carried insurance in case any appliance got fried, so that was some reassurance).

Since I live in the Midwest, I’m most concerned with water and wind damage. In the winter, we get these gremlins called ice dams that back up on frozen gutters and leak into the house. Roof vents have also leaked in the past, which have caused extensive ceiling damage upstairs. Insurance covered that.

What gets tricky is that insurance rarely pays for water that accumulates from burst pipes, broken sump pumps or sewers. Tornadoes and hurricanes? Sure, but not minor floods and seepage.

Here are some other problem areas when it comes to homeowner’s insurance:

Roof damage
As I mentioned above, big storm damage is generally covered. If you’re hit by a hailstorm, then claim payment depends on the size of the hail and what it did to your roof and vehicles.

Termites and rodents
It’s amazing how much damage a critter can do, but insurance generally doesn’t cover pest destruction. Exterminators aren’t covered, either. You’ll need a trapper for skunks and other varmints.

Home office equipment
Most home policies don’t cover computers, copiers and fax machines, especially when it involves power surges. You may need a separate rider or business equipment policy. Surge protectors and uninterrupted power systems usually protect your key equipment.

Liability
What if someone is injured on your property and they sue you? Most policies have liability protection, but check on the limits. Generally $1 million is common, but you can always buy more coverage.

Flooding
As I mentioned above, this is generally not covered. If you live on a flood plain, buy low-cost government flood insurance separately.

Normal wear and tear
Don’t expect your insurer to pay to replace a 20-year-old roof that hasn’t been damaged by a storm, old siding or other items that just wear out.

Mold
Since this became a huge problem a few years ago, many insurers stopped covering this and added exemptions, except in rare cases. Check your policy “endorsements” to see if your insurer covers this. In insurance jargon, an endorsement or “rider” is a clause insurers add to your policy that says they will or won’t cover a certain kind of claim.

Earthquakes
Like flooding, this may require a special policy or coverage, depending upon where you live.

Keep in mind that, depending upon how much you want to spend, you can always buy more insurance. You can even get coverage to protect against identity theft. Generally, though, you can save the most amount of money by keeping deductibles high, which lowers premiums.

No matter what kind of policy you get, make sure you have inflation protection and replacement cost coverage. Even though the value of the contents of your home or apartment may have declined, the cost of replacing them hasn’t.

5 comments

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I live near Joplin, Missouri, which just endured an EF-5 tornado that plowed through the city with 200mph+ winds. My parents’ home was badly damaged, & I’m learning about the interpretation of fine print.

For example, debris removal/demolition is another thing to watch for with insurance policies. (To get a yard cleaned up by the city & FEMA, the city is mandating that residents submit a copy of their homeowner’s insurance policy to the city with a form so that insurance can be billed. If you don’t have insurance to cover that, then that’s an issue.)

Another issue pertains to what happens if you have a tree in your yard that falls into someone else’s house; in Missouri, if a neighbor’s tree falls onto your yard–& I just had a 7,000-pound nieghbor’s oak tree removed from a roof–whatever lands across your property is yours, not theirs. That cost me $2,500.

Posted by DennuyD | Report as abusive

My heart goes out to all those folks who lost family members or were devastated by the spring tornadoes. I hope that this will trigger more careful inspections of homeowner policies. The fine print can be costly.

Posted by johnwasik | Report as abusive

Unrelated:

Why doesn’t the comprehensive part of my insurance policy on the car go down with time (as the street value of the car typically does)?

What kind of actuarial voodoo makes it possible for the insurance companies to say it doesn’t matter what we pay out to you if your car is totalled, but you have to pay us the same every year.

Posted by juggernaut | Report as abusive

Wow, those are terrible stories. I lucked out, I guess. I had pipes that froze and burst in the winter, and because I was away at the time, the damage was very severe, ruining a very large portion of the house. Fortunately, I was covered for that, and after months of a complete rebuilding job, have new walls, resurfaced floors, and a new paint job.

So my insurance was excellent. I also think it has to do with where you are – I’m guessing that if a particular phenomenon happens all the time in an area, insurance companies won’t cover it. I’m in an area with no frequent floods, no tornadoes, and no hurricanes, and I assume that worked in my favor.

Posted by flamenquito | Report as abusive

[…] 8 home issues your insurer doesn’t cover […]

Posted by More flooding woes along the Missouri, Souris rivers « The Crisis Jones Report | Report as abusive

#9 the insured does not have medical coverage under home owner policy. Another words if you get hurt in your own home, falling down stairs, burnt in fire, your home owners policy does not give you a cent for your medical. It only covers people not living in the home.

Posted by sicofscams | Report as abusive