Beware: your home insurance doesn't cover these ten things



Unfortunately, bad things happen every day - from devastating floods to burglaries. But do you know exactly what your homeowner's insurance would cover if any tragedy or catastrophe came along?

"Most people find out too late what their insurance policy covers, and many times, it doesn't cover what they thought it would," says Susan Voss, Iowa Insurance Commissioner and past president of the National Association of Insurance Commissioners (NAIC).

The reality is that home insurance policies have limitations and exceptions, so you need to know what's included in yours and get additional coverage if necessary.

Intrigued? Then keep reading to discover ten things basic insurance policies don't cover.

#1 - Trampoline Injuries

Good luck finding an insurance policy that will cover those fun and bouncy contraptions. That's because most insurance companies don't want anything to do with them, Voss says.

Why? Because there's too much risk and danger associated with trampolines. In fact, in 2011 alone, more than 83,000 injuries from trampolines sent people to emergency rooms, according to the U.S. Consumer Product Safety Commission.

But if you're still set on having a trampoline in your yard, you'll likely need a separate policy to cover the trampoline, and you'll also need to take safety precautions to uphold the coverage.

For example, some companies will offer extra coverage for a trampoline, but only if the owners follow the policy safety guidelines. This extra coverage, known as a "rider," is added to the regular homeowner's insurance policy, says Michael Barry, vice president of media relations for the Insurance Information Institute (III).

For additional protection against injuries, also be sure to have comprehensive health coverage.

[Is your trampoline covered by home insurance? Click to find home insurance providers now.]

#2 - Deaths or Injuries from Pools

Backyard pools offer so much fun in the sun. But unfortunately, pools are also where many accidents can happen.

Tragically, an average of 3,533 fatal unintentional drownings (non-boating related) took place each year in the United States from 2005 to 2009, according to the Centers for Disease Control and Prevention (CDC). Among children from 1 to 4 years old, most drowned in someone's residential pool.

As a result, "pools are considered an 'attractive nuisance' and it may be advisable to purchase additional liability insurance," notes an III article published on their website.

So if you have a pool, or plan on getting one, Barry suggests you talk with your insurance agent about purchasing an umbrella liability policy. This type of insurance gives you extra coverage in the event you are sued for injuries caused to others or damages to people's property.

Barry also adds that "having the proper fencing around [pools] is essential for safety and for insurance liability, even if your local government doesn't require a fence."

[Think an umbrella policy is right for you? Click to compare home insurance rates now.]

#3 - Aggressive Dog Attacks

As much as we might hate to admit it, a man's best friend isn't so friendly all the time. This is why insurance companies have become leery of covering certain aggressive breeds, Barry says.

And it's no surprise that there's concern, since more than 4.5 million dog bites happen each year, with 885,000 Americans seeking medical attention, according to the Centers for Disease Control and Prevention's "Dog Bite: Fact Sheet."

"Every insurance company is different in what dogs they will include in the home insurance. They stay away from covering breeds such as pit bulls or Doberman pinschers," he adds.

But even if you don't have an aggressive breed, if your dog has bitten someone, your company may charge a higher premium or exclude the dog from coverage, according to the III.

So talk to your insurance company to see if Fido's covered. If he's not, talk to your insurer about the additional policies you may need to take out.

[Think you may need some more coverage? Click to compare home insurance now.]

#4 - Earthquakes

Earthquakes can cause a lot of damage, and unfortunately, they're not covered in a standard insurance policy, says Barry.

However, you can buy separate earthquake coverage from your insurance company to stay protected, according to the III, which adds that "in earthquake prone states like California, the policy comes with a high deductible."

The deductible is based on a percentage of the replacement value of the home and contents rather than a dollar amount, says Barry. For instance, if you have a $300,000 home destroyed by a quake, the policy might ask for you to pay a 15 percent (or $45,000) deductible to get the rebuild started, Barry adds.

But with that said, paying 15 percent is still much better than paying 100 percent when it comes to rebuilding your home.

[Want to protect your home from earthquake damage? Click to find the right home insurance now.]

#5 - Stolen or Destroyed Cash

Are you storing your money under the mattress or in a coffee can? If so, you might want to reconsider that savings method.

Why? Because your home insurance will likely only cover up to $1,000 cash if it is stolen or destroyed in some catastrophe, says Barry.

And while this probably isn't the best news for people who prefer to keep their money at home, think of it this way: It will be hard to convince an insurance company that you had $4,000 in cash in your home without some kind of proof, such as a check stub.

So keeping your money in the bank might just be a safer route to go.

# 6 - Jewelry, Fine Art, Rare Collections

Your baseball cards, diamond jewelry, rare books, and other collections probably have sentimental and great financial meaning to you.

However, if they're worth more than $1,000 to $2,000, their full value most likely isn't covered under your standard homeowners policy, Barry says. That's because most standard home insurance policies have limits on what they pay out on items such as jewelry.

With that in mind, it might be a good idea to protect your valuables with a separate insurance rider that specifies exactly what type of items you own, Barry says. You could have a jewelry rider, an artwork rider, and so on.

Before you purchase these riders, however, you'll want to get an appraisal of each item, Voss says. This way, you'll be covered for the full value of your items in the event of a loss.

[Need some extra coverage for your valuables? Click to compare home insurance quotes now.]

#7 - Damage or Injury due to Construction Work

Renovating your home can be a lot of fun. But don't expect your standard home insurance policy to cover you if there is damage to your home while you're doing construction.

So if you're planning to remodel your home, you should look into what's called a builder's risk policy (also known as a "course of construction" policy). The coverage generally protects a home from damage during the construction process, including damage from wind and rain, or even theft.

But if you're hiring a contractor, also be sure that they are licensed for any liability they may cause.

"Make sure to get a copy of [the contractor's] insurance certificate from the insurance company that covers them. If the contractor does something that hurts your home or injures someone, they pay for it - not you," he says.

You should also notify your insurance agent of what type of work you are having done, says Barry. That's because if there is no record of new construction to your home, and get served with a lawsuit, your insurance can't cover for you.

[Planning to remodel soon? Click to find the right home insurance now.]

#8 - Mold

If mold creeps into your walls or floors, you may not get what you expected from your insurance company to repair the problems.

"Commonly, insurers limit up to $10,000 for damage caused by mold, fungus, or wet rot that was hidden within walls or ceilings or beneath the floors or above the ceilings," said Barry. "Others don't cover mold at all in the standard policies. When it comes to covering mold, there are differences in the way individual companies handle this."

For example, Barry says that many times mold contamination is covered under standard home policies only if it is the result of a covered peril, like the cost of cleaning up mold caused by water from a burst pipe.

So, how can you ensure you're financially protected from mold?

You can buy a mold rider to cover damages from mold and for repairs of your home.

#9 - Floods

Whether flooding happens from rain, rivers, or lakes, don't expect your home and belongings to be covered unless you've purchased a separate flood policy.

In fact, if your home is valued up to $250,000 - with up to $100,000 worth of possessions - you have to purchase a separate policy through the National Flood Insurance Program. If you own a more expensive home, you'll have to get a separate policy through a private insurance company, Barry says.

And if you don't think your home is at risk of flooding, or that you'll receive government aid in the event of disaster, think again.

"Only 15 percent of the country (overall) has flood insurance," Barry says. "People are under the impression that the federal government will bail them out if their home is flooded. If your area is declared a federal disaster area, all you can get is up to $33,000 in assistance, although usually the average amount is only $9,000 to $10,000."

[Think you may need some extra coverage? Click to find the right home insurance now.]

# 10 - Sewer Backup

It might not be as apparent a threat as theft or fire, but sewer backup can also cause a substantial amount of damage to your home - and be a real drain on your wallet.

In fact, backed up sewers can cause thousands of dollars in damage to floors, walls, furniture, and electrical systems, according to the III.

"When we were flooded in 2008 and the sewer backed up in our basement, that was when I decided to go read my homeowner's insurance policy. Unfortunately, it didn't cover it," says Voss.

Perhaps that's why Barry says "it's worth taking a look at your policy once in awhile to understand what you are paying for."

Some insurance companies include sewer backups, while others ask that you pay for a sewer backup rider, which is often called a Water Backup or Sump Pump Overflow endorsement. These riders will help with the cost of cleanup and replacing items destroyed by the mess, says Barry.

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