Do home insurance policies cover everything? No! There are coverage holes in every home policy as to what they cover and what they don’t cover. In last week’s post, I introduced 3 Items No Home Policy Covers, including:
- Acts of War
- Nuclear Melt Down
- Flood
This week I’ll add 4 more holes in most home insurance policies.
- Earthquake
- Foundation Damage
- Sinkhole
- Damage from Insects & Rodents
Earthquake: Everyone automatically looks west to California and the west coast when earthquakes are mentioned. Google a current picture of the Washington Monument and you’ll see it’s covered in scaffolding as they continue to repair the damage caused by the earthquake that occurred on August 23, 2011.There have been numerous earthquakes in north Texas and Oklahoma that many believe are related to fracking or injecting waste solution into waste wells.
An earthquake can occur anywhere and no home insurance policy covers it. In order to add that coverage on to a Texas home insurance policy:
- A home owner can add optional coverage to the home policy via an endorsement
- Or purchase a standalone earthquake policy
We have access to both options. For more information on earthquake coverage.
Foundation Damage: Many people mistakenly think foundation coverage is included on their home policy. Even if the wording on the quote or policy says foundation coverage, this is really what I refer to as coverage for:
- Foundation Access
- Foundation Egress
Much of Texas soil has high clay content. This means our soil shrinks and cracks when it gets dry and expands when it’s damp. If your foundation is damaged or moves due to soil movement or erosion, no home policy covers that. For more information on optional foundation coverage.
Usually this comes up due to a leak either in or below the slab. A plumber is called in and needs to cut through the slab to access the leak and repair it. The home policy may or may not cover the actual repair of the leak as some policies do and other’s do not, but the cutting into the foundation and then later filling it back in is covered if the home owner has added this optional coverage.
Sinkholes: Sinkholes made the national news when one opened up under the home of Jeff Bush in Seffner, Florida on the evening of March 1st. Mr. Bush was presumed dead when he disappeared into the sinkhole and could not be rescued. When this happened, I had a few people ask me if they were eligible for sinkhole coverage.
Unfortunately for Texas home owners, this is a cut and dried issue; there’s no sinkhole coverage available that I’ve found. I did hear a rumor that one of my carriers who specialize in high end homes ($1 million and more in value) covers it, but what I read of the policy did not convince me that was the case. For our neighbors in Louisiana and Florida, they do have access to sinkhole coverage. This is usually added as an option to their existing home policy. Like earthquake or flood coverage, if this isn’t added, then there is no coverage available.
Insect & Rodent Damage: Most home policies provide some coverage for damage to the home that’s caused by an animal. If you live in one of Texas’ metropolitan areas such as Dallas / Fort Worth, Austin, San Antonio and Houston, we really don’t have to worry too much about damage caused by a bear looking for food. There is the occasional wayward horse, longhorn, or neighbor’s pet. And then there are those pesky pests such as:
- Squirrels
- Rats & Mice
- Raccoons
- Carpenter ants & Termites
- Crickets & Grasshoppers
Most Texas home policies exclude damage to the home caused by:
- The owner’s own pets
- Rodents – this applies to any damage caused by rats, mice & squirrels
- Insects – this applies to termites, spiders, ants of any kind
Claims have been filed and paid on damage caused by:
- Wild animals other than rodents (raccoons, possums, etc.)
- A neighbor’s pet
The caveat is there has to be damage. In Utah this spring, two homes were found to have very large bee hives either in the roof or in a bedroom wall. The number of bees in one hive was estimated at 40,000 and about 60,000 for the other bee hive. Both hives were safely removed and the home owners were able to share in the honey that was produced in their home, but insurance would probably not cover the removal of the hives and the subsequent clean up inside the walls or roof as bees are insects.
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