The big one: flood is never covered
No standard homeowners policy covers flood. Not a cheap one, not an expensive one. Flood is a separate policy, typically through the National Flood Insurance Program or a private flood market. If water arrives from outside and rises — heavy rain, overflowing creek, storm surge, snowmelt — that's flood, and a standard policy excludes it.
The distinction that matters at claim time: water falling from above and entering through a sudden opening (a hail-damaged roof, say) is usually covered. Water rising from below is flood, and it isn't. You do not have to live in a mapped flood zone to flood.
Sewer and drain backup
Water backing up through drains or a failed sump pump is typically excluded from a base policy, but it's usually available as an inexpensive endorsement. For anyone with a finished basement, this is one of the highest-value add-ons available.
Earth movement
Earthquake, landslide, mudflow and sinkholes are standard exclusions. Earthquake coverage is available separately or by endorsement. Worth asking about even in areas not considered high-risk — the coverage is often cheaper than people assume.
Maintenance, wear and neglect
Insurance covers sudden and accidental loss, not deterioration. Excluded almost everywhere:
- Wear and tear, rot, rust and general aging
- Mold — often excluded or sharply capped, especially when tied to an ongoing leak
- Termites, rodents and insect damage
- A roof that failed from age rather than a storm
- Damage that resulted from a leak you knew about and left alone
This is the most common source of denied claims. A slow leak under a sink that rots a floor over two years is a maintenance issue. The same pipe bursting suddenly is usually a covered loss.
Limits that act like exclusions
Some property is covered — but only up to a small sublimit that most people never notice:
- Jewelry, watches and furs — often capped low for theft specifically.
- Firearms, silverware, collectibles and fine art — each typically carries its own sublimit.
- Cash — capped very low.
- Business property in the home — usually minimal coverage.
The fix is scheduling: listing a specific item with its own limit, usually with an appraisal. If you own a ring worth more than your sublimit, it is effectively uninsured for theft until you schedule it.
Other common gaps
- Home-based business liability — a client injured at your house is generally not covered by a homeowners policy.
- Vehicles — anything licensed for the road falls under auto insurance.
- Certain dog breeds and attractive nuisances — trampolines and pools can be excluded or surcharged.
- Vacancy — most policies restrict coverage on a home left unoccupied beyond a set period, commonly 30 or 60 days.
Replacement cost vs actual cash value
This one quietly decides how much you get paid. Replacement cost pays to replace with new. Actual cash value pays depreciated value — a ten-year-old roof paid at actual cash value may not fund a new roof. Check which one applies to your dwelling and to your personal property, because they can differ within the same policy.
Also worth reviewing after any renovation: if your dwelling limit still reflects what the house was worth before you finished the basement, you may be underinsured through no fault of the policy.
Common questions
Does homeowners insurance cover flood damage?
No. Flood is excluded from every standard homeowners policy and requires separate coverage through the National Flood Insurance Program or a private flood insurer. Water that rises from outside is flood; water entering suddenly through storm damage to the structure is typically covered.
Why was my water damage claim denied?
The most common reason is that the damage was gradual rather than sudden. Insurance covers sudden and accidental loss, so a slow leak that caused rot over time is generally treated as a maintenance issue, while a pipe that bursts suddenly is usually covered.
Is my jewelry fully covered by homeowners insurance?
Usually not. Most policies cap jewelry theft at a low sublimit. Items worth more than that limit need to be scheduled individually, typically with an appraisal, to be fully covered.
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