Know What Your Homeowner's Policy Doesn't Cover

More insurance companies are offering a menu of choices for a homeowner’s policy – the better to fit it to your specific needs. However, it is all the more reason to know what your standard policy does and does not cover. In many states, certain perils and natural disasters are excluded, but there are some less obvious exclusions that you should know about.

Luxury and heirloom items: You usually have to add a rider to cover more than the basic coverage allows for expensive jewelry or valuable antiques and heirlooms.

Sewage or water backup: Not an uncommon occurrence, yet most standard policies don’t include coverage.

Home-based business: Many standard policies cap coverage for business property losses.

All risk versus named perils policy: The first covers most losses except ones that are excluded by the policy; the second covers specifically named perils only. You need to thoroughly review the list of excluded or named perils.