Which Two Things Are Not Usually Covered by Homeowners Insurance
Homeowners insurance gives people a sense of security. You know that if something unexpected happens, you can file a claim and get the damage repaired without draining your savings. But not all events and losses fall under the safety net of a standard policy. There are key gaps that can leave you responsible for the full cost of repairs if you do not plan ahead.
Two of the most common exclusions you will find in homeowners insurance policies are flood damage and earthquake damage. These risks can be devastating, but they require separate coverage because of the high cost and regional frequency of these events. Understanding what is excluded is just as important as knowing what is covered, because it shapes the way you protect your home, your finances, and your peace of mind.
Why Insurance Companies Exclude Certain Risks
Insurance works by pooling risk across many policyholders. When certain risks are too frequent, too costly, or concentrated in specific regions, they can make the system unsustainable. Floods and earthquakes fall into that category. In flood-prone areas or along fault lines, the chance of severe damage is much higher than average. Covering these events in every standard policy would mean dramatically higher premiums for everyone.
To manage this, insurance companies separate these hazards into standalone policies or endorsements. That way, only homeowners who face these risks directly bear the cost of insuring against them. For you, this means that if you live in a floodplain, coastal area, or earthquake-prone region, you need to purchase additional coverage to be fully protected.
Flood Damage
Floods are one of the most expensive natural disasters in the United States. Even a few inches of water in your home can cause tens of thousands of dollars in damage. Standard homeowners insurance almost always excludes flood damage, whether it comes from heavy rain, storm surges, overflowing rivers, or melting snow.
The only way to protect yourself financially from flood damage is to buy a separate flood insurance policy. These are often available through the National Flood Insurance Program (NFIP) or private insurers. Flood insurance covers structural damage, electrical and plumbing systems, appliances, and flooring. Many policies also cover detached structures like garages.
If you are not in a high-risk flood zone, you may think you do not need this coverage, but it is worth reconsidering. FEMA data shows that a large share of flood claims come from moderate or low-risk areas. A severe storm can overwhelm drainage systems anywhere, so even if your mortgage lender does not require flood insurance, you may benefit from having it.
Earthquake Damage
Earthquakes, landslides, and other earth movements are another major exclusion in homeowners insurance policies. Like floods, earthquakes can cause catastrophic damage to foundations, walls, roofs, and utilities. Because these events are concentrated in certain geographic areas and can affect large numbers of homes at once, they are excluded from standard coverage.
Earthquake insurance is available as a standalone policy or an endorsement. In California, for example, the California Earthquake Authority provides this coverage to homeowners through participating insurers. Coverage typically includes repairs to your home, replacement of personal property, and additional living expenses if you must move out during repairs.
Deductibles for earthquake insurance are usually higher than for standard policies. They can range from 5% to 25% of your home’s insured value, which means you need to plan for that out-of-pocket cost in the event of a claim. Still, without this coverage, the entire financial burden of rebuilding would fall on you.
Wear and Tear and Neglect: The Quiet Exclusion
While floods and earthquakes are the headline exclusions, there is another category that often surprises homeowners: damage caused by neglect, poor maintenance, or normal wear and tear. Your homeowners policy is designed to cover sudden, unexpected events, not slow-developing problems.
If your roof leaks because it was not maintained, or your HVAC system fails due to lack of servicing, your insurer is likely to deny the claim. Similarly, damage from termites, mold, or rust is often excluded unless you can prove it resulted from a covered event like a burst pipe.
This is why proactive home maintenance is critical. Schedule regular roof inspections, clean gutters, service your HVAC system, check plumbing for leaks, and seal any gaps that could allow pests or water inside. Preventive care not only reduces the risk of a claim denial but also extends the life of your home’s major systems.
How to Protect Yourself Against Excluded Risks in Home Insurance
Knowing that certain risks are not covered is only half the battle. The next step is to put protections in place that close those gaps.
- Add the right endorsements or policies – If you live in an area with any flood or earthquake risk, look into standalone coverage. In some regions, lenders require it, but even if they do not, it can be a smart investment.
- Build an emergency fund – Keep funds set aside to cover your deductible and smaller repairs. This will give you more flexibility in deciding whether to file a claim.
- Stay on top of maintenance – Document your upkeep. If you ever need to prove that damage was not caused by neglect, having service records and inspection reports will help your case.
- Understand your exclusions fully – Every policy has a section listing what is not covered. Read it carefully, ask your agent to explain anything unclear, and review it annually in case your needs have changed.
The Role of a Professional Home Insurance Review
Policies are complex, and exclusions are sometimes buried in fine print. An annual review with your insurance agent or broker can ensure you understand what is and is not covered. This is also the time to adjust your coverage for any home improvements, changes in local risk factors, or new personal priorities.
A good insurance professional will help you compare coverage options, assess your risk tolerance, and identify cost-effective ways to protect your home. They can also update you on any new products or changes in laws that could impact your policy. For example, federal or state programs sometimes expand eligibility for certain types of disaster coverage, which could make protection more affordable.
Why Home Insurance Matters for HVAC Systems?
As an HVAC company, we see firsthand how many homeowners believe their system failures are automatically covered by insurance. The truth is, unless the damage results from a sudden covered event, most HVAC repairs and replacements are the homeowner’s responsibility.
If your air conditioner fails due to a power surge after a storm, you might have coverage. But if it stops blowing cool air because of age, clogged filters, or worn-out components, that falls under maintenance and is excluded. This is why regular professional servicing is essential, and why homeowners should budget for eventual replacement even if they have insurance.
On A Final Note;
Your homeowners insurance is an important safety net, but it is not all-inclusive. Flood and earthquake damage are two of the most significant exclusions, and damage from neglect or wear and tear is another common gap. Understanding these limits allows you to take proactive steps—whether that means buying extra coverage, budgeting for out-of-pocket costs, or staying vigilant with maintenance.
Protecting your home is about more than paying your premium each month. It is about knowing where your safety net ends and putting other measures in place to keep your investment secure.
Need advice on protecting your HVAC system from unexpected breakdowns and costly repairs? Warren Mechanical can help you keep your equipment in peak condition so you avoid the kind of neglect-related issues that insurance will not cover. Call us today for a maintenance plan tailored to your home.
