Let’s say a meteorite hits your home. Unlikely, but it could happen. Once you make sure everyone is OK, you’re probably wondering about that big hole in your roof. Is the damage covered by your homeowners insurance? You bet it is.

But now let’s imagine a much more likely scenario: The creek that runs behind your home overflows, filling your basement with muck and destroying your priceless collection of sports memorabilia. Sorry, that’s not covered unless you have separate flood insurance, typically provided by the federal government.

What’s included — or not included — in homeowners insurance coverage can be a bit mysterious to the uninitiated. Fire, theft and storm damage account for most homeowners but policies have long lists detailing what is covered and excluded. Dave Phillips, a spokesman for State Farm, says the company gets calls from concerned homeowners all the time. “Every time we have meteor showers and storms, there are questions asked by policyholders,” he says.

Here are some examples of misfortunes that may or may not be covered by your homeowners policy:

Space junk
Homeowners are covered if meteors, space junk or blue ice — frozen chunks of blue lavatory fluid and sewage leaked from airplanes — hit their house, Phillips says. Basically, anything falling from the sky is covered. That includes damage from wind, lightning, hail and rain.

Water damage
Water damage from flooding is rarely covered, whether from overflowing rivers or rising seas. Flood insurance may be available through the federal government if you live in a flood-prone area.

Plumbing disasters or roof damage that results in water getting in to your house are covered under some circumstances. If it’s a maintenance issue, and parts of your house have simply worn out, it’s not covered. But if a sudden occurrence like a windstorm or frozen pipes results in damage, it’s typically covered.

Earthquakes
Earthquakes, sinkholes and landslides are not covered by standard homeowners insurance. Separate earthquake insurance is available, although it tends to be expensive. Deductibles can be quite high, usually a percentage of the home’s replacement value rather than a specific dollar amount, according to the Insurance Information Institute. Because of the costs, many people forgo the coverage even in earthquake-prone parts of the country like California. A 2014 survey by the institute found that only 7% of American homeowners had earthquake insurance.

Dog bites
Animals are another big area of concern. If your dog bites someone, you’re probably covered under the liability portion of your homeowners insurance. Jeannette Clark, an agent for Farmers Insurance in Dalton Gardens, Idaho, says one of her clients was taking a walk with her baby in a stroller and the family’s pet Rottweiler on a leash. Some neighborhood kids ran up to say hello to the baby. “The Rottweiler was not happy about it,” Clark says. The children were hurt, the dog owner was sued, and the liability coverage on her homeowners policy covered the settlement.

Phillips cautions that some insurers exclude coverage for certain breeds of dogs such as pit bulls, or other breeds deemed potentially dangerous. State Farm’s coverage doesn’t work that way. If there are frequent claims on a dog, it may be excluded from a policy, Phillips says. “But we will not exclude based on breed.”

Damage by wild animals
Wild animals damaging the home or its contents, or injuring a visitor, are covered only under certain circumstances, Phillips says. Bears and cougars sometimes tear through screen doors or damage siding trying to get in to find food. “It could be defined as vandalism or mischievous activity,” Phillips says. “You see it more and more with bears because of urban sprawl and development.”

But termite damage, or a nest of mice chewing through the wiring in the back of your stove? That’s not covered. Phillips offers this rule of thumb: “If it’s an infestation, it’s not covered. If it’s an invasion, it’s covered.”

Loss or theft of valuables
Normally, there’s a certain amount of coverage for valuables like jewelry, cash or collectibles, Clark says. If you have more than $2,500 worth of guns, gems or artwork, you probably need to buy additional coverage.

If you have questions about your coverage, call your agent or read through the fine print on your policy. And you can stop peering up at the sky, looking for blue ice. Airlines can’t intentionally dump it during flight, and leaks are extremely rare.


Source: http://www.nerdwallet.com/blog/insurance/2015/01/16/insurance-mysteries-revealed-homeowners-policy-doesnt/