What Homeowners Insurance Doesn't Cover

home and earthquake

A homeowners insurance policy offers basic protection from the most common perils. But because it's built with the average American household in mind, your policy might not account for some risks associated with your location or cover all your possessions.


Flood insurance is mandatory when you have a mortgage on a home in a high-risk flood area. Even if you live outside a high-risk area, don't make the mistake of assuming you'll never experience a flood. In fact, nearly 20% of flood insurance claims come from areas of moderate to low risk, according to the National Flood Insurance Program. Whether it's a flash flood or just a few inches from a rainstorm, water can cause massive damage to your home and belongings -- and if you're not financially prepared, the effects can be devastating.


Basic homeowners insurance policies don't offer earthquake coverage. Anyone who has seen the aftermath of an earthquake understands the devastation they can cause. The extensive shaking and cracking can demolish entire buildings -- destroying your home and possessions. If you live in an area prone to earthquakes, consider strengthening your policy with this coverage.

Home Businesses

Your homeowners policy only provides a limited amount of coverage for business equipment. You also are not covered for any liability related to your home business, such as food poisoning resulting from your catering or a broken ankle suffered by a student who tripped while leaving a piano lesson. If you run a business from home or have expensive office equipment, you may need additional coverage.

Valuable Personal Property

Homeowners policies offer sufficient coverage for most personal property. However, if valuable items such as jewelry, watches, firearms, furs and silverware are stolen or damaged, homeowners policies limit the amount they will pay. And lost items are generally not covered.

If you own expensive items or collections, consider valuable personal property insurance. A VPP policy will help protect your possessions from theft or damage, and you won't pay a deductible if you have a claim.

Your Future Assets

As your assets grow, consider shielding them with additional liability insurance. An umbrella insurance policy helps protect you and your future earnings if you're in a serious automobile accident or if someone is injured at your home. This type of insurance provides liability coverage in excess of your auto and home policies to protect your net worth.

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