What is not protected by most homeowners insurance?

When it comes to homeowners insurance, it's just as important to understand what isn't covered as what is. The last thing you want after a disaster is to discover that your insurance doesn't cover everything. Home insurance helps protect your house and belongings from certain risks, but there are some types of damage that most basic policies don't include. Let’s take a look at what homeowners insurance usually doesn’t cover.

What is homeowners insurance coverage?

A standard homeowners insurance policy is meant to help cover costs if your property gets damaged. It can also protect you if someone gets hurt on your property and can even cover the loss of personal belongings, in the event of a burglary.

But, it doesn't cover everything. Expensive items like jewellery, art, or collectibles often aren’t fully covered under a standard policy. Plus, damage from things like floods or earthquakes usually requires extra insurance. It’s a good idea to double-check your liability coverage to make sure you're fully protected.

Ten things homeowners insurance doesn't cover

You've invested a lot in your home, so it's important to know what isn’t covered by most homeowners insurance. This way, you can decide if you need extra coverage for better protection. Here are ten things that homeowners insurance doesn't cover:

1. Neglect

Your home insurance might become invalid if you neglect basic maintenance and let your home fall into disrepair. For example, if your roof has missing shingles and that leads to water damage, your insurance provider could deny your claim for the repairs. Other common examples include mould or pest infestations, which can seriously damage your home.

For instance, mould often forms from unnoticed water leaks. If you don’t catch the water damage and mould in time, your insurance likely won’t cover it. However, if something accidental happens, like a pipe burst, then that kind of damage is typically covered. However, insurance companies might see burst pipes as neglect if they could have been prevented with proper care.

2. Everyday wear and tear

Standard homeowners insurance also doesn’t cover normal wear and tear. That’s because your policy is meant to protect your home from sudden, catastrophic events like fires or major storm damage. As a homeowner, it’s your responsibility to handle basic home maintenance to keep your home in good shape. So, if your plumbing system wears out over time, your insurance probably won’t cover the damage.

3. Flood damage

While standard homeowners insurance usually covers some water damage, like if a pipe bursts by accident, it typically doesn’t cover flood damage. If you live in a flood-prone area, you'll want to get separate flood insurance, such as overland water coverage.

4. Sewer backups

There's not much worse than discovering sewage water flowing up through your drains or toilet during a particularly bad storm. Unfortunately, damage from this isn't covered by home insurance, either. Sewer backups can happen when heavy rain, melting snow, or a blockage in the sewer lines leads to flooding in your home, often causing serious damage to your basement or other areas.

Depending on the cause, you might have to cover the repair costs yourself. Luckily, you can add sewer backup coverage to your home insurance.

5. Earthquakes

Home insurance usually doesn’t cover natural disasters involving earth movements, like earthquakes, mudslides or sinkholes. Insurance companies are often reluctant to fully cover events like earthquakes or landslides because they can impact a large number of homeowners at the same time. However, if you live in earthquake-prone areas, you can add earthquake insurance to your policy to help protect against these types of events.

6. Identity theft

It's simple to think about insuring physical items, but these days, a burglar can steal more than just your valuables. Identity theft is a real threat, especially if someone breaks in and gains access to your personal information. Since identity theft is becoming more common, some insurance companies now offer identity theft insurance as part of their homeowners insurance policies, but not all do—be sure to check if yours includes it.

7. Home business

If you run a business from home, your homeowners insurance probably won’t cover things like your tech or professional equipment. For example, if you’re a consultant with a home office, your setup likely wouldn’t be covered if there’s a fire or burglary. That’s why it’s a good idea to get separate home business insurance to protect your business assets in case of fire, theft, or other covered incidents.

8. Home vacancy

Different insurance companies may define "vacancy" in their own way, but they all agree on one thing: an empty home is more at risk. If you leave your home vacant for a long time without letting your insurer know, you could risk having your claims denied or your policy cancelled.

Before heading out on an extended vacation, it's a good idea to check with your insurance provider about coverage options while your home is unoccupied.

9. Valuables/collectibles

Your standard home insurance policy might not offer enough coverage for highly valuable items like fine art, jewellery, designer clothes, firearms, or family heirlooms. These policies often fall short when it comes to covering the full worth—both sentimental and financial—of these items.

To make sure your valuables are properly protected, you can increase your coverage limits, add specific riders for each item, or even get high-value home insurance.

10. Cash

If you keep a lot of cash at home, it’s important to know that most insurance policies offer very limited coverage for lost cash—usually no more than a few hundred dollars. Cash is treated like other valuables, such as coins, art, or jewellery, so you won’t be able to recover much unless you have a special policy or additional coverage.

Discover what homeowners insurance doesn't cover and safeguard your home with the right protection. Contact BrokerLink today to explore comprehensive coverage options tailored to your needs. Don't leave your home vulnerable—get the security you deserve with BrokerLink!

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So then, what does standard homeowners insurance cover?

Now that we've explained ten of the most common things that home insurance doesn't cover, let's help you understand just what is actually covered by most homeowners insurance policies:

Dwelling coverage

Almost every home insurance policy includes dwelling coverage—and for good reason. It protects the physical structure of your home, like the walls, doors, and windows. So, if your home is damaged in a fire, for example, dwelling coverage helps pay for repairs or replacements. This type of coverage specifically kicks in when damage is caused by a "named peril," which typically includes things like:

• Fire
• Lightning
• Smoke
• Theft
• Wind
• Car / aircraft impact
• Explosion
• Falling objects

Content(s) coverage

Contents coverage is another key part of most home insurance policies, protecting your personal belongings from damage or loss. Like dwelling coverage, it only applies if the damage or loss is caused by a named peril listed in your policy—such as fire, theft, or smoke.

When choosing contents coverage, it's important to make sure your coverage limit matches the value of your belongings. If you own expensive items like jewelry, artwork, or vintage wine, you might need additional coverage or high-value home insurance. But for more standard items like furniture, clothing, and electronics, basic contents coverage should be enough.

Personal liability coverage

Personal liability coverage is another valuable type of home insurance that many homeowners should consider. While dwelling and contents coverage protect your property, personal liability coverage protects you from legal and financial issues.

For example, if a guest gets injured on your property and decides to sue, you could be held responsible for the costs. With personal liability coverage, your insurance company would help cover expenses like legal fees, medical bills, and even repair costs, saving you from a potentially large financial burden.

Are natural disasters covered under my home insurance policy?

Natural disasters are on the rise, and it's understandable that homeowners are concerned. The good news is that most home insurance policies cover events like wind storms, hail, lightning, and wildfires. However, there are a couple of things your policy might not include.

Chances are, your policy doesn’t cover flooding or earthquakes. That’s because not every area is at risk for these events. If you need coverage for either, you’ll have to buy separate policies—one for earthquake insurance and another for flood insurance.

What about renters and condo owners?

Homeowners insurance looks different for tenants and condo owners. This is because they do not own the actual building they live in. For condo owners, they own their specific units, and for tenants, they are only renting out the units they live in.

So, let's talk about what isn't covered by renters insurance and condo insurance that's different from homeowners insurance:

Tenant insurance

Tenant insurance is a great way for renters to protect their personal belongings, but it’s important to understand its limits. Like with homeowners insurance, it doesn't cover:

• Flood damage
• Sewer backups
• Earthquakes
• Identity theft
• Home businesses
• Home vacancy
• High-value items
• Large amounts of cash

However, while it does cover your personal property (up to a certain limit), it doesn’t include structural damage to the building—that’s the landlord’s responsibility. It's also important to note that the landlord's insurance policy does not cover you or your belongings.

Knowing these exclusions helps you make informed choices about your coverage, ensuring you have the protection you need. Tenant insurance is a solid safeguard for your stuff, but knowing its boundaries lets you decide if you need extra coverage.

Condo insurance

Again, like with homeowners insurance, it doesn't cover:

• Flood damage
• Sewer backups
• Earthquakes
• Identity theft
• Home businesses
• Home vacancy
• High-value items
• Large amounts of cash
• Wear and tear
• Neglect

The key difference between homeowners insurance and condo insurance is that, unlike home insurance which covers the entire structure of a house, it does not cover the building itself, which is insured by the Condo Corporation. However, condo insurance does cover any improvements and upgrades you've made inside your unit.

It's also important to note that, like with landlord insurance, the Condo Corporation's insurance policy does not cover you, your belongings, or any upgrades you've made to your condominium unit.

Further, if you choose to rent out your condo, your condo insurance will not cover any property belonging to that tenant. They will need to purchase their own renters/tenant insurance policy.

So, how do I know how much home insurance I need?

One of the toughest parts of buying home insurance is figuring out how much coverage you need. If you don’t have enough, you could face huge out-of-pocket expenses if something goes wrong. But if you have too much, you’ll end up overpaying for coverage you may never use.

The coverage for your house itself is called dwelling coverage, which protects you financially if your home is damaged. This part of your policy helps cover the cost of repairing or rebuilding your house after events like fire, smoke, wind, or lightning. Most mortgage lenders require you to have enough dwelling coverage as part of your loan agreement.

You’ll want enough coverage to completely rebuild your home if it’s destroyed, usually through a replacement cost policy. This means your insurance company would cover the cost to rebuild a home of the same size and quality.

Keep in mind, the replacement cost of your home isn’t the same as its market value. If you base your coverage on the current market value, you could end up being over insured or underinsured.

What is the average cost of home insurance in Canada?

The cost of home insurance varies based on your specific situation and the coverage you choose. The easiest way to find out how much it’ll cost is to get several quotes from multiple insurance companies.

Here at BrokerLink, our home insurance brokers can do the work for you and provide you with multiple quotes so you can compare coverage and prices from different insurers. It’s fast, free, and simple. Plus, talking to a broker can save you the time and hassle of researching policies on your own—and you might even save money by getting a plan that’s tailored to your needs.

Get a home insurance quote with BrokerLink

At BrokerLink, we’re here to help you with any insurance needs you may have. Whether it’s insuring your home, car, business, recreational items, or pets, let us help you find the best coverage possible.

You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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