Top 8 Losses that may not be covered by Your
Texas insurance can be very difficult to understand, HO-A, B,C, HO-2,3,5, “Named Peril Policies” vs “All Risk Policies”. Each company will offer their basic coverage
types and many additional endorsement options, and, or exclusions of coverage.
Since there are so many different types it can be very difficult to understand exactly what your policy does or does not cover.
Your home is your since largest investment so its important that you protect it properly not assuming that every insurance policy is the same.
Below is a list of the top 8 losses, your homeowner’s policy may not insure against.
No homeowner’s policy covers you against a flood. Flood losses are only covered by the government through a FEMA and the National Flood Insurance Program, or
NFIP. We can run a Flood quote here our office, ask us for details. Many lenders will require you to have a flood policy if your home is subject to a flood, based on maps create by government agency.
2. Continuous or Repeated Leakage (from plumbing, heating, or air conditioning
This coverage is not included in every homeowner’s policy. In fact, it must be added as an endorsement to your policy in many states. If your sink has a slow leak for three months and rots your wood cabinets, you will not be reimbursed for the cost of repairs unless your policy specifically covers this peril.
3 . Backup of sewers/drains
You don’t want to discover the hard way that you had no coverage for this unfortunate event. Take note, many policies only cover the damages if the backup occurs within a sewer or drain on your property, versus in a pipe or sewer down the street from your home.
4. Freezing of plumbing or heating system
Almost all but the lowest level of homeowner’s insurance policies will protect you against damages from this type of loss. However, almost every policy includes a condition requiring the owner to take certain necessary precautions to avoid such an event. For example, if you live in an area of the U.S. where temperatures can dip below freezing for longer periods of time, you must maintain adequate heat in your home to avoid the pipes freezing. If you left your home for a two-week vacation and turned the heat off, causing your pipes to freeze, you would have to pay for it out of your own pocket.
5. Mold, Fungi or Other Microbes
Mold damage is covered, but the coverage is typically restricted to mold on property that has been damaged by accidental or sudden discharge of water (if that is a covered cause of loss on your policy: see #3). An additional restriction usually requires the damage to be reported within thirty days of the covered loss if it is hidden or otherwise concealed, within a wall for example.
6. Damage to Foundation/Slab
If you did not specifically discuss this coverage with your agent, you may not have it. Depending on where you live in the U.S., this may not affect your terribly. In areas with poor soil that can expand and contract regularly, foundation damage may be a big concern to you. Purchasing this coverage is not a “fix all.” Typically, only damage caused by a covered water leak (see #2, 3 and 4 above) is covered. Damage resulting from a flood would only be covered by a flood insurance policy obtained through FEMA or the NFIP.
7. Damage resulting from Construction Defects
While this is not covered by your homeowner’s policy, there is a silver lining to this cloud. Damage resulting from construction defects would be covered by the commercial general liability policy insuring the company that built your home. There is no guarantee you would be able to collect from the company, but that is where you would start the process of attempting to get reimbursed for damages
Depending where you live in the U.S., you may scoff at the perceived need for earthquake insurance.. In California, you’d be crazy not to have it. Be reminded Midwesterners, the largest fault line in the continent is the New Madrid Fault Line, which stretches south from Illinois to Arkansas. If there is a quake and it destroys your home, no coverage could mean a potential bankruptcy filing.
It can be tough to make time in your life to evaluate your insurance needs. However, this list demonstrates the necessity to do so. Saving money is important, but not at the risk of losing your biggest investment.