Many homeowners assume their policy covers nearly everything that could happen to their house. Unfortunately, that belief often proves costly. Standard home insurance is designed to protect against common risks but some of the most expensive disasters fall outside its protection.
Understanding what’s not covered is just as important as knowing what is especially as claims exclusions tighten and weather risks rise in 2026.
Here’s a breakdown of the most common home insurance coverage gaps homeowners face and how to protect yourself.
Flood Damage
This remains the biggest misconception in home insurance.
Standard policies do not cover flooding, including damage from:
- Heavy rain or storm surge
- Hurricanes or overflowing rivers
- Flash floods
- Poor drainage causing water to enter the home
Flood coverage must be purchased separately through:
- The National Flood Insurance Program (NFIP)
- Select private flood insurers
Even homeowners outside designated flood zones increasingly face flood claims due to worsening storm patterns.
Earthquake Damage
Earthquakes are excluded from almost all standard homeowners insurance policies regardless of where you live.
Earthquake insurance is available as a separate policy or rider and typically includes high deductibles (10%-25% of the home’s coverage limit).
This matters for residents of:
- California
- Washington
- Oregon
- Utah
- Nevada
- Central U.S. fault zones
Wear and Tear
Home insurance covers sudden and accidental damage not maintenance failures.
Losses denied under this exclusion include:
- Roof leaks from aging shingles
- Plumbing failures caused by corrosion
- HVAC breakdowns
- Rot from long-term moisture
- Termite or pest damage
Insurance is not a replacement for routine maintenance or warranties.
Mold Damage
Mold coverage is limited and often excluded if caused by:
- Long-term water seepage
- Maintenance neglect
- Poor ventilation
Some insurers offer small mold endorsements with caps between $5,000 and $10,000, but true mold remediation is rarely fully covered.
Sewer Backup & Drain Failure
Damage from sewer or drain backups is not included by default in standard policies.
Without a rider, homeowners must pay out of pocket for:
- Basement flood cleanup
- Sewer line failures
- Overflow related damage
Sewer backup endorsements are inexpensive, usually $30–$100 per year making this one of the highest value coverages homeowners add.
High Value Items
Home insurance limits personal property coverage for:
- Jewelry
- Watches
- Art
- Firearms
- Coins
- Designer handbags
- Electronics
Typical caps:
- Jewelry: $1,500 – $2,500
- Firearms: $2,500
- Collectibles: $1,000 – $2,500
Coverage must be expanded through scheduled personal property riders with appraisals.
Business Activity at Home
Running a home based business introduces uncovered risks:
- Client injuries in your home
- Equipment damage
- Inventory losses
Home policies do not cover business liability or losses unless you add:
- A small business endorsement
- A separate business insurance policy
Certain Dog Breeds & Animal Liability
Some insurers:
- Exclude certain dog breeds from liability coverage
- Limit payouts for animal related injuries
This varies by carrier and state checking your exclusions list is critical.
Gradual Water Leaks
Floods from burst pipes are covered but slow leaks are usually denied.
Not covered:
- Long term pipe seepage
- Small leaks causing mold over time
- Deteriorated plumbing claims
Insurance requires damages to stem from a sudden, accidental cause.
Intentional Damage or Neglect
Claims may be denied for damage caused by:
- Failure to repair known hazards
- Repeated maintenance issues
- Vacant home neglect
Policies expect homeowners to mitigate foreseeable risks.
Ordinance & Code Gaps
After major damage, rebuilding costs may spike due to updated building codes.
Standard policies do not automatically cover code upgrades, which can add tens of thousands to rebuild costs.
This requires an Ordinance or Law endorsement.
Climate Events That Exceed Policy Sub Limits
Some weather risks especially wind or hail now carry:
- Special deductibles
- Reduced caps
- Percentage based deductibles tied to dwelling value
Homeowners in coastal or hail prone states face these limits frequently.
How to Close Common Coverage Gaps
Here are the most affordable protection upgrades homeowners should consider:
| Coverage Gap | Solution | Typical Cost |
| Flood exclusion | NFIP or private flood policy | $300 – $900/year |
| Sewer backup | Sewer endorsement | $30 – $100/year |
| Mold caps | Mold rider | $40 – $150/year |
| Valuables limits | Scheduled property coverage | Value based |
| Business risks | Home business rider | $100 – $400/year |
| Code upgrades | Ordinance or law endorsement | $30 – $100/year |
Home insurance policies change yearly exclusions and sub limits often tighten without direct notification.
Review coverage annually especially if you:
- Remodeled or expanded living space
- Increased remote work or home business use
- Purchased valuables
- Live in high weather-risk areas
The biggest risk homeowners make isn’t skipping insurance, it’s assuming protection exists where it doesn’t.
Thousands of denied claims stem each year from homeowners discovering exclusions after disaster strikes.
Home insurance protects against common risks but it does not protect against everything.
Floods, earthquakes, long-term maintenance damage, sewer backups, valuables, and business activities frequently fall outside default coverage.
Fortunately, most gaps can be closed for modest annual costs if identified early.
Before renewing your policy:
- Request a full exclusions summary
- Compare riders from at least 2 to 3 insurers
- Ask for a coverage gap review
Small endorsements today can prevent massive out of pocket losses tomorrow.
In another related article, How to Find Cheap Home Insurance in CT
