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10 Things That May Not Be Covered By Homeowner Insurance

Responsible homeowners get insurance to protect themselves if their house is hit by catastrophe beyond what they can pay from their savings.  Unfortunately, that insurance typically excludes many of the costs that can spring up with home ownership, from legally necessary upgrades to the devastation caused by natural disasters such as earthquakes and flooding.  Here are 10 expenses, from A to (almost) Z, that insurance may not cover:

A total rebuild
How much does the home insurance actually cover?  Thanks to the caps written into most policies, it’s unlikely to be enough to completely rebuild the house.  If the home is leveled by a fire, owners will likely pay the excess expenses out-of-pocket.

Burst pipes
Does the insurance policy cover water damage due to burst pipes?  In many cases, it depends.  If the pipe bursts due to negligence, for example not draining them before leaving on a winter vacation, the homeowner is likely on the hook for repairs.

Deductibles
Most of these policies have a deductible that must be paid out-of-pocket before they will carry the excess.  The Consumer Federation of America reports that these are going up by 2 to 5 percent.

Earthquakes
Home insurance policies do not cover earthquake damage.  In some parts of the country, this is a non-issue.  In earthquake-prone areas such as along the West Coast, homeowners need to pursue a separate policy.  

Flooding
A house hit by a flood is in the same boat as one that was damaged by an earthquake.  Private insurance policies rarely cover flood damage, as many policy holders are unpleasantly surprised to discover all-too-late.  Concerned homeowners need to contact the National Flood Insurance Program, run by FEMA.

Lost wages
Even with a straightforward case of damage and a cooperative insurance company, filing for coverage can be a lengthy, complex process which is only exacerbated by the day-to-day challenges of living without a functional house.  Insurance rarely covers wages lost while struggling for days with these issues.  

Multiple bids
The contractors that insurance companies recommend to repair home damage may not be the most competent or reasonably priced.  A savvy homeowner will contact a variety of contractor companies for bids.

Post-traumatic emotional support
Losing a home is one of the must difficult, upsetting things a homeowner can go through.  Many people turn to therapy or reach out to online support groups to help them get their lives back on track.  These expenses, though vital for the person, are rarely covered by insurance.  

Required upgrades
Laws and zoning requirements change every year.  These can require changes to any area of the house, even those in excellent condition.  Standard insurance policies won’t touch these expenses.  However, homeowners can look for additional ‘ordinance law’ coverage.

Simultaneous events
The fine print of the insurance document may contain a loophole called “anti-concurrent causation.”  In simple terms, if two calamities strike the house at once (for example, an earthquake and wind damage) and one does not fall under insurance coverage, it’s possible the other won’t be covered either.

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