10 Everyday Misfortunes that Insurance Companies Do Not Cover

25 Sep

The normal thing to do after buying a house is to protect it with insurance. That way, if anything bad or unfortunate happens, that person and family are covered. This puts the person’s mind at ease. It helps them believe that no matter what happens, their family and finances are recoverable.

Unfortunately, there are certain everyday misfortunes that insurance companies do not cover. These are certain issues that a homeowner might not think about when shopping for an insurance policy. Here are the most common of these misfortunes to look take into consideration when you are buying insurance.

1. Flooding Can Drain a Bank Account:
People who live close to large bodies of water are probably familiar with this caveat in their insurance policy. Flood insurance is a well-known addition to traditional insurance throughout the coastal regions of the United States. Yet, for newly coastal residents or those concerned about the uptick of flood-related natural disasters, this could a new concern.

Fortunately, if a flood originates in the home, it is usually covered by home insurance. If the sub pump fails, or the hot water heater decides to keel over, the homeowner is covered. However, if a natural disaster is the cause of the flood, there is a special policy that is needed.

Federal Emergency Management Agency (FEMA) is a government-run program that can provide maps to gauge flood zones. The flood maps in much of the United States have gone under review. Therefore, it is a good idea for all homeowners to revisit their flood zone maps. That way, they can see if they need flood insurance, under the new parameters.

2. Sinkholes Often Leave Insured Sunk:
The reason that sinkholes void insurance is due to the common policy stipulation that ‘earth movement’ is not covered. Sinkholes are unfortunately considered earth movement since the earth literally opens. Ergo, these unfortunate and often unforeseeable events are made even more traumatizing by the added insult of no coverage.

Fortunately, in states where sinkholes occur often, there is a special insurance that can be purchased. Akin to flood insurance, this additional security can be purchased at an additional premium. While this might not completely alleviate the sinking feeling, most have in their stomach after hearing this news, it helps.

3. Earthquakes Can Shatter Savings
Earthquakes are scary enough without the added insecurity of insurance coverage. Unfortunately, for many insured, this is the case. This shaky situation also falls under the ‘earth movement’ exclusion from coverage.
For homes that are near fault lines, this is an extremely scary solution. There is a lot of uncertainty that comes with this scenario. Thankfully, there is a way to receive earthquake insurance through a different premium. For insured who live in California or other high-risk areas, having this type of insurance is essential.

4. Mold Can Decay a Home Before It’s Covered
Mold is a horror that is possible in homes throughout the US. It does not take long for mold to grow and sometimes, it can remain completely unseen. That is until it is too late. Therefore, it is important to have insurance for mold, since the fungus can infest anywhere. From bread to balconies and everywhere in-between, mold can wreak havoc on the insured’s life.

While there is no insurance covering bread and most policies have limits or exclusions for such growths. For limits, there is often a cap on the amount of coverage a homeowner receives explained in the policy. For other policies, mold coverage is denied entirely.

Unlike other options on this list, there are no alternative or additional options for mold coverage. However, there are a few, select exceptions. For instance, if a pipe burst or the policy covers a situation under “covered peril”, the claim could be honored. Yet, for most moldy situations, regrettably, all insured are out of luck.

5. Jewelry and Art Are Often Out of Insurance Coverage Luck
There are plenty of literary plots that cite insurance money as a motive for jewelry and art heists. However, in the real world, there is often extremely limited payouts for home insurance claims. The reason these claims are limited is simple; once an item is stolen it is extremely difficult to prove. Anyone could say their burglarized home held the Hope Diamond or their great-grandmothers priceless wedding ring. After it is gone, there is little evidence to prove or disprove its existence.

Thus, it is important for the insured to catalog every item in a home. This will make the claim easier on both the insured and the insurance provider. Additionally, though, if there are valuable items in a home, the insured should obtain a separate policy for the items.

6. Making It Rain with Unsecured Cash is Uninsurable
A surprising amount of people keep a lot of cash in their house. This is not a good idea, as this cash is uninsurable. Firstly, it is impossible to prove how much cash is in the home at any given time. Even with a catalog of the home, cash is meant to be spent. This is useless in the same way it is so hard to prove a cash transaction without a receipt.

Secondly, there are many far more secure ways to store money, which can result in making the insured money. Investing can create a passive income that is undeniably provable and safe. That is a much better option than keeping cash hidden throughout the house.

Therefore, an insurance policy might have a cap of a couple hundred dollars or a “rider” insurance policy is possible. A rider will get the insured a little closer to the actual perceived value. Yet, cash is cash and from an insurance perspective, hoarding a lot of it in a home is not a smart financial decision.

7. Pool or Trampoline Accidents Can Put Homeowners in Hot Water
While most people think of a pool or trampoline as fun, insurance companies only see these backyard playthings as liabilities. These items are a nightmare to insure because of the dangers presented when being used appropriately and unintentionally. Playing on a trampoline or in a pool is dangerous enough, even while people are being supervised. However, pools and trampolines also attract unwanted guests. Children and even adults want to use the equipment and might do so without the owner being aware.

Therefore, a trampoline might not have any coverage options. If options do exist through an insurance company, they are likely in addition to other premium coverage. After all, having a trampoline is extremely risky.

For pools, the same problems arise. However, if there is any coverage offered at all, there will be precautions the insured is expected to take. This precaution is most often having a fence around the pool, which helps keep out unwanted or unsupervised swimmers. If these precautions are not met, the insurance company may negate the claim if there is an issue.

8. Termites Could Eat You Out of House and Home
Termites are nasty critters that literally eat the insured’s home. Yet, damage sustained from these little bugs is often not covered by homeowner’s insurance. The reason is that regular inspections and treatments are part of maintaining a home. If this is done in a timely fashion, there should not be a termite issue. Therefore, if a person fails to keep their home properly maintained, it is on them.

In addition to termites, home insurance policies also do not cover rats, bedbugs, roaches, or other harmful infestations. This might come as a shock to the insured. Yet, it is s good reason to maintain a home appropriately.

9. Sewer Backups Stink in Every Possible Way
Sewer backups are disgusting and often, they can come as a shock to the insured. There is no real warning about a sewer backup. It can simply happen, and it is sometimes a highly expensive issue to resolve. To add insult to smelly injury, most home insurance policies do not cover sewer backups.

Fortunately, sewer backup insurance is available, and it is affordable. This assurance still does little to negate the stinky situation, should the insured find themselves in need of the insurance. Yet, it is nice to know that there is an option that does not break the bank.

10. Old Age is Not an Insurance-Covered Emergency
Wear and tear on a home is inevitable. Everything wears out, eventually. There is not much anyone can do about that. Even homes that are meticulously maintained eventually fall victim to wear and tear issues. However, if a house is maintained, it is sure to last longer than a house a homeowner disregarded.

Either way, though, taking care of a home is a personal financial investment. This is because insurance companies do not cover wear and tear on a home. Of course, this makes sense. As fixing things that go bad after an acceptable lifecycle is part of the responsibility of caring for a home.

Of course, if a storm blows the roof off a home, a claim could be warranted. Yet, the normal wear and tear under which a roof eventually succumbs is natural. It is not cause for an insurance claim.

In summation, there were likely a few misfortunes on this list that surprised homeowners. Often, what is and is not insured can be tricky. Thus, it is important for people to know their policy, as well as the dangers that surround the home. Knowing where a person lives and what their home might be subjected to is essential. The bottom line is that the insured should always keep themselves prepared and informed.

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