No matter what type of homeowners insurance policy you buy, there will always be perils the policy will NOT cover or exclude. It is important to understand these exclusions so you can make a decision on what additional insurance you will need to purchase for your real estate.
For example, do you know which of these circumstances is NOT covered by your homeowners policy?
- Smoke from a nearby fire destroys all of your clothing and linens
- A mudslide destroys your entire backyard and guesthouse
- After a week of hard rain, a leak in your roof damages your upstairs closet, drywall and flooring
Answer: You’re not covered for a leak in your roof…that is a home maintenance issue. Water is specifically excluded unless it was a result from a sudden or accidental discharge of water from a plumbing system or water line. You are also not covered by the mudslide because Earth Movement is specifically excluded, an earthquake policy may cover this loss.
Things Covered By Your Homeowners Insurance Policy
There are a variety of standard homeowners insurance policies. The most common Homeowners Insurance Policies you will find in the state of CA are the HO-3 and the HO-5. In the past, there was the HO-1 and HO-2, which you will seldom find in place in CA. The HO-3 is called the “Special Form” and the HO-5 is the “Comprehensive Form”. Both the HO-3 and HO-5 cover everything except certain perils that are excluded. The most common exclusions are:
- Ordinance or law, such as demolition or construction required to bring your house up to code.
- Earth movement, such as earthquakes, shockwaves, sinkholes, landslides and mudflows.
- Water damage, such as floods, sewer back-ups and water that seeps through the foundation.
- Power failure.
- Neglect, meaning you failed to take reasonable means to save your property during or after a loss.
- War, including undeclared war and civil war.
- Nuclear hazard.
- Intentional loss, meaning something you did on purpose with the intent to cause a loss.
- Governmental action, such as the destruction, confiscation or seizure of covered property by any governmental or public authority.
- Loss to property, resulting from faulty zoning, bad repair or workmanship, faulty construction materials and defective maintenance.
Some of these can be added back to the policy for additional premium, specifically Ordinance of Law and Sewer Back-up. Earth Movement and Water can be purchased on a separate policy via an Earthquake policy or Flood Policy.
Various types of high-value personal property have limited coverage and require your agent to be notified and these items need to be added by endorsement. These items include:
- Fine Jewelry
- Fine Art
- Collectibles like stamps, coins, and memorabilia
- Computers and media
Talk to your agent or broker to find out what your policy excludes and discover if you are adequately protected.
Jacob Pullen, CIC
Pullen Family Insurance Agency, Inc