5 Perils Your Insurance Probably Doesn't Cover

Insurance Blog

If you've ever had to make an insurance claim, you're probably well aware of the fact that what's listed on your policy isn't black and white. Your insurance policy is probably at least 75 pages long, and most insurance agents aren't allowed to give exact details on claim scenarios.

Detailed below are five common perils you might be at risk at if it's not specifically stated on your policy. 

• Water Back-up and Sump Overflow: This is a peril most people would assume is already baked into the policy, and many are surprised that it isn't. When your pipes or sewage back-up, it causes the potential to overflow into your home and cause severe damage. You might think this is covered under typical water damage or even your flood policy, but it's completely separate and you're not covered for it unless you bought the coverage back via an endorsement. 
• Flood: "Does this policy include flood?" is an incredibly common question that most first-time homebuyers ask when purchasing insurance. In almost all cases, flood insurance is a separate policy that is not covered under your homeowners insurance policy. It must be purchased elsewhere. FEMA has set up the National Flood Insurance Program (NFIP), and is the insurance carrier for just about every residential policy out there, although regular insurance carriers act as underwriters for FEMA. This is why you can try to shop around for comparative flood rates, but always get the same rate. 
• Sinkhole: Sinkhole coverage is widely dependent on where you live, and may even be a coverage that is required by your mortgage company. If this isn't the case, and you want to be covered just in case, you'll be surprised to find that your insurance carrier won't offer it without having a sinkhole inspection first. The inspection is only to make sure the home hasn't already suffered from sinkhole damage, and that there is no apparent sinkhole activity on the property. 
• Animal Liability: Back in 2012, there were 16,500 claims involving dog bites alone. This translated to about $479 million in payouts, and made up for over a third of all claims made by homeowners. Since then insurance carriers have been quick to drop this coverage from their policies, though it can be bought back under certain circumstances. However, if you've got a dog that's listed under your carrier's aggressive dog breed list then you can forget about it. 
• Trampoline/Diving Board Liability: Having a trampoline or diving board for most insurance carriers is against underwriting guidelines. This means they simply will not accept the risk of issuing an insurance policy for your home. However, there are some companies that will still take the home as long as you exclude liability coverage in the event that an accident results from either of the two perils. 

A typical HO3 insurance policy will cover almost every type of peril you can really shake a foot at. And as long as you're with a reputable carrier, you're not likely to have a hard time making a claim. However, it's always important to know what is not covered under your insurance policy. 

6 November 2014