Homeowners insurance protects against many disasters, but not everything. Standard policies have surprising exclusions that could leave you financially vulnerable if disaster strikes.
This guide explains:
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12 major disasters NOT covered by standard policies
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Why insurers exclude them
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How to get coverage for excluded perils
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Real-life claim denial examples
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Alternate insurance options
Standard Homeowners Insurance Coverage (HO-3 Policy)
Most policies (HO-3) cover:
Fire & lightning
Windstorms & hail
Theft & vandalism
Falling objects
Weight of ice/snow
Burst pipes
But these 16 major disasters are typically excluded:
1. Floods
Why excluded?
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Floods cause widespread, predictable damage
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Private insurers can’t afford the risk
How to get coverage:
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National Flood Insurance Program (NFIP)
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Private flood insurance (often cheaper)
Real-life example:
After Hurricane Harvey, 80% of Houston flood victims had no flood insurance and paid out-of-pocket.
2. Earthquakes
Why excluded?
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High-risk areas (California, Alaska) make claims too expensive
How to get coverage:
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Standalone earthquake policy (e.g., CEA in California)
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Endorsement added to homeowners policy
Cost:
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$800–$2,500/year in high-risk zones
3. Sewer Backups
Why excluded?
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Aging infrastructure increases risk
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Often caused by floods (already excluded)
How to get coverage:
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Sewer backup endorsement (+$50–$200/year)
Claim denial example:
A family’s basement flooded due to a sewer backup. Their insurer denied the claim because they lacked the endorsement.
4. Mold
Why excluded?
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Expensive to remediate
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Often caused by long-term neglect
How to get coverage:
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Limited mold coverage (e.g., $10K cap)
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Full-coverage endorsements (rare)
Key rule:
Mold from sudden water damage (burst pipe) may be covered. Slow leaks? Denied.
5. Termites & Pest Damage
Why excluded?
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Considered preventable maintenance
Solution:
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Regular pest inspections
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Termite bonds (in some states)
6. Sinkholes
Why excluded?
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Highly localized but catastrophic
How to get coverage:
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Florida & Tennessee require insurers to offer sinkhole coverage
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Other states: Specialty insurers
7. Nuclear Accidents
Why excluded?
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Federally managed under the Price-Anderson Act
Who covers it?
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Government disaster funds
8. War & Terrorism
Why excluded?
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Impossible to predict/price
Exception:
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Fire damage from terrorism (sometimes covered)
9. Government Seizure
Why excluded?
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Eminent domain claims go through courts
10. Power Outage Spoilage
Why excluded?
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Considered an “indirect loss”
How to get coverage:
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Appliance/food spoilage endorsement
11. Dog Bites (Certain Breeds)
Why excluded?
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Pit Bulls, Rottweilers, etc., deemed high-risk
Solution:
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Umbrella liability policy
12. Construction Defects
Why excluded?
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Considered a builder’s responsibility
Solution:
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Home warranty or builder’s insurance
Worst Home Insurance Gaps (Summary Table)
| Disaster | Why Excluded? | How to Get Covered |
|---|---|---|
| Floods | Too widespread | NFIP or private flood insurance |
| Earthquakes | High-risk regions | Standalone earthquake policy |
| Sewer backups | Aging infrastructure | $50–$200 endorsement |
| Mold | Prevention possible | Limited add-ons |
| Termites | Home maintenance issue | Pest control contracts |
3 Biggest Mistakes Homeowners Make
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Assuming “water damage” means all water damage (floods ≠ burst pipes)
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Not reading policy exclusions until after disaster strikes
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Skipping optional endorsements that cost little but protect a lot
Final Verdict: How to Stay Fully Protected
Buy flood insurance (even if not in a high-risk zone)
Add sewer backup coverage (cheap but critical)
Consider earthquake insurance if in a fault zone
Review policy exclusions annually
Have you had a claim denied? Share your story below!
