My homeowners insurance doesn't cover what?

Avoid surprises by understanding your policy.

An insurance policy for your home or apartment is supposed to provide a sense of security. But before you get too comfortable, take time to speak to your agent or insurer to understand what is and isn't covered in your homeowners or renters policy and learn about your homeowners insurance. Don’t wait for disaster to strike and don't make assumptions. The Colorado Division of Insurance and the National Association of Insurance Commissioners (NAIC) offer these tips on homeowners insurance.

According to an NAIC survey, more than half of Americans said they don't have a list of their possessions. Without an accurate inventory, you may not have the right homeowners or renters insurance coverage, and you may forget to claim items lost in a fire or robbery. It’s also important to update your list every year. 

Make a list of your belongings before disaster strikes - If you ever have to file a claim, the insurance company will ask for proof of purchase for all items reported on the claim. Your list should include a comprehensive list of all possessions, including purchase prices, model numbers, and serial numbers, along with pictures of your belongings, especially any high end valuables.

You can start simple by using a pad and pencil, but know there are many versions of home inventory checklists available online and as apps for smartphones - and these versions are detailed and thorough. If you create a physical document, be sure to store a copy in a safe place away from your home, or create an electronic copy and email it to yourself.

A standard homeowner or renters insurance policy contains four parts.

  1. Declarations Page
  2. The Insuring Agreement
  3. Exclusions Section
  4. General Conditions

There are different types of coverages under a standard homeowners or renters policy, and policies vary from company to company, so be sure you read and understand yours.

Renters insurance is different from homeowners insurance in that a renters policy only insures the contents, not the building.  A standard homeowners or renters policy generally provides coverage for either the actual cash value or replacement value of your property. Remember that with any claim, you’ll have to pay your deductible, as detailed in your policy. 

Most standard homeowners and renters insurance policies cover stolen items (however, there may be limits within your policy). Be aware that things such as jewelry, antiques and art often have specific dollar limits that can be far less than their full value. For these items, you may want to consider buying additional coverage.

A typical policy will issue payment to replace or repair anything inside a home damaged by flames, smoke, water, soot and ash.

Don't be surprised if your insurance company asks for an inventory. The company is only required to pay for personal property you can prove you owned at the time of loss. The NAIC home inventory app mentioned above is an easy way to make sure you're prepared.

Standard homeowners and renters policies will cover damage caused by explosions due to causes such as a gas leak. If your neighbor is experimenting with unauthorized chemicals, damage to your home will be covered. However, if you are the one experimenting with unauthorized chemicals, the damage will not be covered. And if the explosion is due to terrorism, it will not be covered.

Homeowners and renters insurance may cover losses resulting from water damage caused by a broken pipe or an upstairs neighbor.  Read your policy carefully and check your policy's exclusions. It will probably be listed under "water damage."

Homeowners and renters insurance DOES NOT cover flood losses. Flood insurance is available under a separate policy through the National Flood Insurance Program (NFIP).

Damage caused by earthquakes is not usually covered in a standard homeowners or renters policy. If you want earthquake coverage, you need to purchase it separately. Earthquake insurance will only cover you for what is stated in the policy. It will not replace everything you lost. However… most earthquake policies only cover damage for earthquakes that occur naturally.  This means that damage caused by earthquakes that may be attributed to oil and gas production, including fracking, might not be covered. 

Unlike earthquakes and floods, tornado damage is typically covered by standard homeowners and renters policies so there is likely no need to purchase additional coverage.

Damage caused by windstorms or hail storms is usually covered. However, flood damage caused by storms is not. If you live in an area prone to flooding, you should consider flood insurance, mentioned above, offered through the National Flood Insurance Program. 

If your drone crashes into someone else's home or vehicle or a person, the accident is your responsibility.  Using a private drone as a hobby is generally covered under a homeowners or renters insurance policy.  So if your drone crashes into your neighbor, your neighbor’s window or your neighbor’s car, the damage will typically be covered by your homeowners or renters insurance.  If your drone damages your car, it may be covered by your auto insurance if you have comprehensive coverage. Generally, policies cover liability for an accident caused by your drone. Check with your agent or insurer to verify your policy includes this important coverage.

In addition, look at the contents section of your homeowners policy, or talk to your agent, to see if your drone will be covered if it is lost, stolen or damaged. Also know that your insurance may not cover privacy violations, so remain mindful of privacy concerns.

Other perils that are not usually covered include: war, nuclear accidents, landslides, mudslides and sinkholes. There may be others listed in your policy. Read your policy or speak with your agent or insurer for a complete list of excluded perils, and to purchase additional coverage you may need such as earthquake, flood or sewer backup coverage.

The NAIC offers consumer pages with more information about homeowners insurance, including information about home inventories, types of coverage, flooding and earthquakes. You can also contact the Colorado Division of Insurance, part of the Department of Regulatory Agencies, where insurance experts can answer your questions and provide easy-to-understand information. Call 303.894.7490 or 800.930.3745 (outside the Denver metro area) or email us at DORA_Insurance@state.co.us.