How we put this guide together: we summarize standard homeowners policy terms, FEMA’s National Flood Insurance Program materials and NerdWallet’s 2026 research. Policies differ, so always read your own policy’s exclusions. See our advertiser disclosure.
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Sponsored listings. Insuretro may be paid if you click a listing; it doesn’t change your price.The main exclusions
| Not covered by a standard policy | How to cover it |
|---|---|
| Flood (rising water from outside) | Separate flood policy: FEMA’s NFIP or a private insurer |
| Earthquake and earth movement | Earthquake policy or endorsement |
| Sewer or drain backup | Water backup endorsement |
| Wear and tear, rot, pests, slow leaks | Not insurable: prevent with maintenance |
| High-value jewelry, art, collectibles above low limits | Scheduled personal property endorsement |
| Home business equipment and liability | Home business endorsement or business policy |
| Short-term rentals of your home | Home-sharing endorsement or specialist policy |
Flood insurance
Flood is the biggest gap for many homeowners, because flooding can happen outside high-risk zones. Key points about FEMA’s National Flood Insurance Program (NFIP):
- Pricing: since Risk Rating 2.0 (new policies from October 1, 2021), premiums reflect each property’s individual flood risk rather than just its flood zone.
- Increases are limited: FEMA says most annual premium increases are capped at 18%, so policies that need to rise move up gradually.
- Coverage limits: NFIP residential policies cover up to $250,000 for the building and $100,000 for contents. Private flood insurance can offer more.
- Waiting period: NFIP policies usually take effect 30 days after purchase, so you can’t wait until a storm is forecast.
Lenders require flood insurance for mortgaged homes in high-risk flood zones, but anyone can buy it.
Earthquake cover
Earthquake damage is excluded from standard policies. Cover is sold as a separate policy or add-on and usually has a high percentage deductible, often 10% or more of the dwelling limit. It is most common in the West Coast states but can be worth considering anywhere with seismic risk.
Wind, hail and hurricane: covered, but with different deductibles
Wind and hail damage is normally covered, but in storm-prone states the deductible for these perils is often a percentage of your dwelling limit rather than a fixed amount. A 2% hurricane deductible on a $400,000 dwelling means you pay the first $8,000. Check your declarations page so you know your real out-of-pocket cost before storm season.
Water damage: what’s in and what’s out
- Usually covered: sudden and accidental water damage, such as a burst pipe.
- Usually not covered: slow leaks you didn’t fix, mold from long-term moisture, sewer backup (unless you add an endorsement) and flood.
Valuables and special limits
Policies set low sub-limits for categories such as jewelry, watches, furs, cash, firearms and collectibles, often a few thousand dollars per category for theft. If you own high-value items, a scheduled personal property endorsement covers them for an agreed value, often with no deductible and broader protection, including loss.
Gaps in how much a claim pays
- Building code upgrades: after major damage, local codes may require costly upgrades. Standard policies pay little for these unless you add ordinance or law coverage.
- Rebuilding costs that exceed your limit: extended or guaranteed replacement cost endorsements pay a set percentage above your dwelling limit, which helps when building costs spike after a disaster.
- Roofs at actual cash value: some policies pay depreciated value for older roofs, which can leave a large shortfall.
Other useful endorsements
- Equipment breakdown: covers sudden failure of home systems and appliances, such as a furnace or air conditioner.
- Service line: covers damage to underground water, sewer or utility lines on your property.
- Identity theft: helps with costs of restoring your identity.
- Home business: extends cover to business equipment and some business liability.
Why the gaps matter more now
NOAA counted 27 US disasters in 2024 that each caused at least $1 billion in damage, and NerdWallet reports that rates are rising fastest where wildfire, hail and hurricanes are becoming more frequent. More severe weather means more homeowners discover their exclusions the hard way.
Common situations: covered or not?
| Situation | Usually covered by a standard policy? |
|---|---|
| Kitchen fire | Yes |
| Burst pipe in winter | Yes, if sudden and you kept the home heated |
| Hail damages the roof | Yes, subject to any wind/hail deductible |
| Tree falls on the house in a storm | Yes |
| River overflows into the basement | No: needs flood insurance |
| Sewer backs up into the basement | No: needs water backup cover |
| Earthquake cracks the foundation | No: needs earthquake cover |
| Termites damage the floor | No: maintenance issue |
| Laptop stolen from your car | Usually yes, under personal property, minus the deductible |
| Guest slips on your steps and sues | Yes, under personal liability |
| Engagement ring lost | Usually only if scheduled |
General guide only. Policies differ, so check your own policy wording.
A quick gap check
- Look up your flood risk on FEMA’s flood maps and consider flood cover even outside high-risk zones.
- Find your wind or hurricane deductible and make sure you could pay it.
- Add water backup cover if you have a basement.
- Schedule jewelry and other valuables worth more than your policy’s sub-limits.
- Tell your insurer about a home business or short-term rental.
Savings tip: filling a gap doesn’t have to raise your total cost much. Use savings from comparing quotes and bundling to pay for the add-ons you actually need.
See also average home insurance cost by state.
Common questions
Does home insurance cover flooding?
No. Flood damage from rising water is excluded from standard homeowners policies. You need a separate flood policy, such as one from FEMA’s National Flood Insurance Program.
How long does flood insurance take to start?
NFIP flood policies usually take effect 30 days after you buy them, with some exceptions, for example when required for a new mortgage.
Is a burst pipe covered?
Usually yes, if the damage is sudden and accidental. Damage from a slow leak that wasn’t repaired is usually not covered.
Sources
- FEMA: Understanding Risk Rating 2.0 fact sheet (July 2025)
- FloodSmart (FEMA National Flood Insurance Program)
- NerdWallet: Average homeowners insurance cost, 2026 (May 2026)
Prices, discounts and rules change often and vary by state and driver. Figures were checked in October 2026; confirm details with the insurer or your state insurance department.