What Coverages Aren’t Automatically Included in a Homeowners Policy?

Buying homeowners insurance does not mean every problem involving your house is automatically covered.

Some losses homeowners assume are included require separate coverage to be added to the policy. Service line damage, water and sewer backup, equipment breakdown, food spoilage after certain power outages, identity theft and personal cyber events are all examples worth asking about. They are not different versions of the same coverage. They solve completely different problems.

Does my homeowners policy cover the water or sewer line running underground to my house?

No. Your standard homeowners policy does not cover that underground service line unless service line coverage has been added.

No one wants to be blindsided with a sewer-line repair running between $10,000 and $20,000.

Service line coverage can include excavation, repair or replacement of a covered damaged line and some restoration after the line is dug up. Depending on the endorsement, covered causes of loss can include things such as tree-root intrusion, freezing, corrosion or other damage.

If you're comparing service line coverage with one of the water or sewer warranties that shows up in the mail, compare more than price. Look at the coverage limit, deductible, covered causes of loss, exclusions and who pays to put the yard, sidewalk or driveway back together afterward. In our experience, adding service line coverage to a homeowners policy is probably going to cost less than buying a separate water or sewer line warranty.

If I have service line coverage, am I covered if sewage backs up into my basement?

No. Those are two different losses.

Service line coverage addresses the underground line. Water and sewer backup coverage addresses damage caused when water or sewage backs up into the home.

If you have a finished basement, think about flooring, drywall, built-ins and furniture. But finished or not, think about what is actually downstairs: tools, electronics, stored belongings, your furnace, water heater and anything else you would have to clean, repair or replace. Then add the cost of sewage cleanup and sanitization.

My furnace stopped working. Is that a homeowners claim?

Not simply because it stopped working.

If an old furnace finally quits because it is worn out, that's maintenance. If lightning strikes the house or a covered electrical surge burns up the control board, the furnace was damaged by a covered loss. That's a homeowners claim, subject to the deductible and policy terms.

If the blower motor suddenly seizes and damages other components, the equipment itself has broken down. That's the kind of loss equipment breakdown coverage is designed for when the endorsement has been added.

Is equipment breakdown coverage the same as a home warranty?

No. A home warranty is a separate service contract. Equipment breakdown is insurance coverage added to the homeowners policy for certain mechanical or electrical breakdowns. It does not cover normal wear and tear.

Does homeowners insurance cover food in my refrigerator or freezer after a power outage?

Coverage for refrigerated food after a power outage depends on what caused the outage and how the policy is written. Some policies or endorsements provide refrigerated-products or food-spoilage coverage.

Think about what is actually in your refrigerator and freezer. Replacing a freezer full of meat and groceries after a long outage can mean hundreds of dollars in food. Check what causes of loss qualify, what limit applies, whether there is a deductible, and whether the outage has to originate on the residence premises.

Does homeowners insurance cover identity theft?

Identity theft and personal cyber coverage can be added to many homeowners policies.

Identity theft coverage focuses on restoring your identity and covered expenses involved in that process. Personal cyber coverage can address additional cyber events such as certain online fraud or cyber extortion. Some insurers package these protections together; others offer different options.

Getting a fraudulent credit-card charge reversed is not the same thing as putting a stolen identity back together. Check who in the household is covered, whether children are included, what restoration services are provided, what expenses are reimbursed, whether online fraud or cyber extortion is included, and what limits apply.

You don't need every endorsement an insurance company offers.

What you do need is to know where your policy stops.

Look at your actual house and your actual life. Do you have a finished basement? What do you store downstairs? Who is responsible for the underground lines to your house? What equipment would be expensive to replace after an internal breakdown? What's sitting in your freezer? How much of your family's financial life is online?

Then look at the gaps that actually matter to you.

The worst time to find out a coverage wasn't automatically included is after the thing you assumed was covered has already happened.