A standard home insurance policy does not cover flood, earthquake, normal wear and tear, most mold, termites and other pests, sewer backup, sump pump failure, damage from a home-based business, the full value of jewelry and other high-value items, or the cost of bringing an older home up to current building codes after a loss. Almost every one of these gaps can be closed, some with a cheap endorsement and others with a separate policy, but only if you add them before the damage happens. Here are the ten that catch homeowners most often.
1. Flood Damage
This is the biggest and most misunderstood exclusion. No standard homeowners policy covers flood, meaning rising surface water: overflowing rivers and creeks, storm surge, flash flooding, and water that pools on saturated ground and comes in at the foundation.
How to close it: A separate flood policy through the federal National Flood Insurance Program or a private flood insurer. NFIP residential coverage is typically capped at $250,000 for the structure and $100,000 for contents; private carriers can go higher. Critically, new flood policies usually carry a waiting period of about 30 days, so buying one when a storm appears in the forecast will not help.
2. Earthquakes and Earth Movement
Earthquakes, landslides, mudflows, sinkholes, and general earth movement are excluded everywhere, not just in California. Fire that follows an earthquake is usually covered; the shaking damage itself is not.
How to close it: An earthquake endorsement or a standalone earthquake policy. Expect a percentage-based deductible, often 5% to 20% of the dwelling limit rather than a flat dollar amount. That is a large number on a $500,000 home.
3. Maintenance, Wear and Tear, and Neglect
Insurance covers losses that are sudden and accidental. It does not cover things wearing out: a 25-year-old roof that starts leaking, a water heater at the end of its life, deteriorating pipes, foundation settling, and rot are all maintenance.
This drives a large share of disputed claims. If a pipe bursts today and floods the kitchen, that is a covered loss. If a fitting has been dripping behind a wall for eight months, the insurer will call it a maintenance failure. Fix small leaks immediately and document the repairs. Those are the same habits that help with common home insurance claims.
How to close it: You cannot insure maintenance, but you can add a service line endorsement for buried water, sewer, and electrical lines, and an equipment breakdown endorsement for mechanical failure of HVAC systems, water heaters, and appliances. Both are inexpensive.
4. Mold (Mostly)
Mold coverage is limited almost everywhere. If mold results directly from a covered loss, say a burst pipe you reported and dried out promptly, policies often pay, but subject to a sub-limit commonly in the $5,000 to $10,000 range. Mold that grows from humidity, a long-term leak, or a loss you failed to mitigate is excluded outright.
How to close it: Ask about increasing the mold remediation sub-limit, which many insurers offer as an endorsement. Then act accordingly: report water losses immediately and start drying within 24 to 48 hours, because insurers routinely deny mold claims on the grounds that the homeowner let it grow.
5. Termites, Rodents, and Other Pests
Termite and carpenter ant damage, rodent chewing, bird and bat infestations, and the cost of extermination are all excluded. Insurers treat infestation as preventable through maintenance.
How to close it: There is generally no endorsement. The answer is an annual pest inspection and a termite bond. One narrow exception: if rodents chew wiring and cause a fire, the fire damage is normally covered even though the wiring is not.
6. Sewer and Drain Backup
When the municipal sewer line backs up into your basement, or your own drain line clogs and overflows, a standard policy does not cover it. This is separate from the flood exclusion, and it surprises people because the damage looks identical to a covered water loss.
How to close it: A water backup endorsement, one of the best-value add-ons in home insurance, usually inexpensive for $5,000 to $25,000 of coverage. With a finished basement, it is close to essential.
7. Sump Pump Failure
A sump pump that fails or is overwhelmed during a storm is excluded for the same reason as sewer backup: the water arrives through a drainage system rather than a sudden accidental discharge.
How to close it: The same water backup endorsement usually covers sump pump failure, but confirm the wording, since some carriers sell it separately. Also add a battery backup pump: the most common failure mode is a power outage during the exact storm that needed it running.
8. High-Value Jewelry, Watches, and Collectibles
Your policy may carry $150,000 of personal property coverage and still pay only $1,500 for a stolen engagement ring. Standard policies apply category sub-limits to theft of jewelry, watches, and furs, commonly $1,000 to $2,500 in total, with similar caps on firearms, silverware, and cash.
How to close it: Scheduling, which means listing high-value items on the policy with an appraisal and a stated value. Scheduled items are typically covered for their full appraised amount, often with no deductible and with broader perils including accidental loss, which is how most rings actually disappear.
9. Home Business Activity
If you run a business out of your home, standard homeowners coverage will not follow it. Business inventory and equipment are covered only up to a small sub-limit, often around $2,500 on premises, and liability coverage excludes business activities entirely. If a client trips on your porch, that claim is not covered.
How to close it: A home business endorsement for low-risk operations, or a business owner’s policy for anything larger. Even remote work with occasional client visits deserves a call to your agent, because the liability exclusion applies no matter how small the business is.
10. Ordinance and Law (Code Upgrade Costs)
After a significant loss, you have to rebuild to today’s building code, not the code in force when the house was built. That can mean new wiring, updated plumbing, hurricane straps, egress windows, or a sprinkler system. A standard policy pays to restore what you had, not to fund the upgrades the inspector now requires. Policies often include a small amount of ordinance and law coverage, commonly around 10% of the dwelling limit, which is rarely enough on an older home.
How to close it: Increase the ordinance and law limit. It is inexpensive and matters most for houses built before roughly 1980. It’s one of several settings worth reviewing in the basics of home insurance.
A Few Other Exclusions Worth Knowing
- Intentional damage, war, nuclear hazard, and government seizure or condemnation.
- Vacancy. Most policies restrict or void coverage once a home has been vacant for 30 to 60 consecutive days. Between tenants or renovating? Ask for a vacant home endorsement.
- Certain dog breeds and attractive nuisances such as trampolines and diving boards, which some insurers exclude from liability or refuse to insure at all, sometimes to the point of dropping the policy at renewal.
How to Find Your Own Gaps in 20 Minutes
Pull out the declarations page and check five things: your dwelling limit against local rebuilding costs, whether you have a separate percentage deductible for wind or hail, your personal property sub-limits, which endorsements are already listed, and whether contents are insured at replacement cost or actual cash value. Then call your agent with the gaps above and ask the price of each.
Frequently Asked Questions
Does home insurance cover water damage?
It depends on where the water came from. Water that sprays suddenly from inside, like a burst pipe or a failed washing machine hose, is typically covered. Water rising from the ground is flood and needs a separate policy. Water backing up through drains needs a water backup endorsement. A leak you left unaddressed is maintenance.
Is roof damage covered by homeowners insurance?
Sudden storm damage from wind or hail is generally covered, but many insurers now settle older roofs on an actual cash value basis, paying replacement cost minus depreciation. Roofs that fail from age or poor installation are excluded as wear and tear. Check your policy for a roof surfacing schedule or a separate wind and hail deductible.
Do I need flood insurance if I’m not in a flood zone?
Often yes. A substantial share of flood claims come from properties outside designated high-risk zones, because flooding follows drainage, development, and rainfall rather than map boundaries. Coverage outside those zones is usually inexpensive, and lenders do not require it, so the decision is yours.
How much do these endorsements typically cost?
Most are modest annual additions rather than major expenses, while scheduling jewelry is priced as a percentage of the appraised value. Earthquake and flood are separate policies whose premiums vary widely by location.
