Revealing Homeowners Insurance Risks

Most people only think of homeowners insurance when they select their insurer, write premium checks and have a claim. By the time something goes wrong, it's usually too late to begin learning about the policy. Some coverage gaps, however, can't be covered. For example, Insurers won't cover you for a nuclear accident.

Many exclusions, however, vary by insurer. If you know them in advance, you may be able to switch carriers or buy extra insurance. So check your policy for the following:

Mold and Water Damage
Most home insurers exclude mold coverage. Many insurers also limit how much they'll cover for water damage. And you may have trouble getting coverage for a home that's had water claims in the past.

Sewer Backup
Sewage backups are frequently not covered unless you purchase a special rider. Many homeowners try to get their cities to pay for such damage, but governments typically aren't liable unless the homeowner can prove negligence—and is willing to go to court. A cheaper solution? Check your policy, and if not covered, buy the rider for $50 to $100.

Natural Disasters (Earthquakes, Floods, Hurricanes)
The more likely you are to be a natural disaster victim, the more reluctant insurers may be to cover you. Residents who live near the Atlantic Ocean or Gulf of Mexico typically need to supplement their homeowners insurance with flood insurance coverage. As floods aren't covered under homeowners insurance policies—something hurricane victims learn to their chagrin. The National Flood Insurance Program, run by the Federal Emergency Management Agency, offers coverage.

Neglect
Insurers expect you to deal with any maintenance issues on your own dime. Insurance covers sudden and unexpected losses, not losses from termites, rodent infestations or a water leak you didn't fix. You're expected to detect and correct problems that are preventable. If you don't, damage typically won't be covered by your insurer.

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