What homeowners insurance doesn't cover (2026): 14 exclusions and the riders that fix each

Every standard homeowners policy refuses to pay for certain perils, certain property categories, and certain circumstances. Most of these refusals are buried in 30-50 pages of forms language, and the first time most homeowners learn what's excluded is after a loss.

Three patterns illustrate the shape of the problem. After Hurricane Helene's catastrophic flooding through western North Carolina in September 2024, many homeowners learned that wind damage from the storm was covered but flooding from rising water was not — the standard policy excludes flood, full stop, and most homes outside a designated Special Flood Hazard Area carry no separate flood policy. In drier regions, slow termite damage discovered years after the fact frequently produces five-figure repair bills with no insurance recovery, because every standard policy excludes pest infestation. After Western wildfires, smoke and water remediation may be covered but secondary mold growth in attics often is not, capped at a small endorsement limit if it's covered at all.

This guide is the list, organized by frequency and typical dollar exposure, with the specific endorsements that close each gap.

What you actually need to know

A standard HO-3 policy excludes 14 categories of loss outright. Six of them — flood, earthquake, sewer backup, mold, ordinance/law, and earth movement — together cause most "I thought I was covered" claim denials.
Most exclusions can be re-bought through endorsements. Cost is usually $20-200/year per endorsement. Adding three or four to a base policy typically adds $300-600 to annual premium and closes the most common gaps.
A few exclusions can't be re-bought through your homeowners policy. Flood requires NFIP or a private flood policy; earthquake usually requires a separate carrier; significant business activity at home requires a separate commercial policy.
The biggest single gap is flood. Even one inch of water can cause significant damage, and standard policies pay zero for any flood from outside the home.
Sub-limits are not exclusions but they function like them. Your policy may cover jewelry "in theory" but cap the payout at $1,500 total for theft. Always check sub-limits separately from exclusions.

How exclusions work in a homeowners policy

A standard HO-3 policy is open perils on the dwelling — meaning it covers everything except what's specifically excluded. The exclusions list is therefore the most consequential section in the policy. It defines the boundary of "everything else."

The exclusions live in a section usually titled "Section I — Exclusions" (for property loss) and "Section II — Exclusions" (for liability loss). Each carrier's wording differs, but the standard ISO HO-3 form uses the same exclusion categories across most insurers.

Two important framings:

Excluded peril ≠ excluded property. Flood is excluded as a peril — the policy excludes the cause of damage, not the damaged property. If a storm blows the roof off and rain comes in, that's wind (covered). If a river rises and water fills the basement, that's flood (excluded). The same wet drywall could be paid or denied depending on which peril caused it.
Excluded ≠ partially covered. Some "exclusions" really mean "covered only with a rider." Sewer backup is an exclusion, but the same carrier sells a sewer-backup endorsement for $50-100/year that closes the gap. Read every exclusion paired with the available endorsement.

The 14 exclusions, in order of dollar exposure

1. Flood

Excluded. The largest single exclusion in homeowners insurance.

What it means: any damage from rising water — river or stream overflow, hurricane storm surge, heavy-rain runoff that pools and enters from outside the home, dam failure — is not covered.

Dollar exposure: a single inch of floodwater commonly causes more than $25,000 in damage on a typical home, per FEMA estimates. A major flood event can run six figures.

The fix: NFIP flood insurance ($600-2,500/year depending on flood zone) or a private flood policy. NFIP coverage caps at $250,000 for the dwelling and $100,000 for contents. Above those caps, private "excess flood" carriers fill in.

When required: if you have a federally backed mortgage and live in a Special Flood Hazard Area (SFHA), the lender will require flood insurance. If you don't live in an SFHA, it's voluntary, and most homes outside the SFHA are uninsured for flood. Risk has changed faster than zone maps in many regions.

2. Earthquake / earth movement

Excluded. Includes earthquakes, landslides, mudslides, sinkholes, and any vertical or horizontal shift of the ground.

Dollar exposure: a moderate earthquake (M5.5-6.5) routinely causes $30,000-150,000 in foundation, slab, chimney, and structural damage on a typical home.

The fix: separate earthquake policy. In California, often through CEA — California Earthquake Authority. In other states, through specialty carriers. Pricing varies: $400-2,000+ in California, $100-500 in moderate-risk states. Deductibles are typically high (10-25% of dwelling coverage).

When to consider it: any home in California, Alaska, Hawaii, the Pacific Northwest, the New Madrid seismic zone (Missouri/Tennessee/Arkansas), or near any known fault. A meaningful share of US homes have material earthquake risk; far fewer carry coverage.

3. Sewer / drain / sump-pump backup

Excluded by default. A separate, paid endorsement closes it.

What it means: water backing up through floor drains, toilets, washing-machine standpipes, or sump-pump failure is not covered by the base policy. Common after heavy rain when municipal sewer mains are over capacity.

Dollar exposure: $5,000-50,000 per event; in finished basements with high-end finishes, six figures.

The fix: water/sewer backup endorsement, typically $50-150/year for $5,000-25,000 of coverage. Higher limits available. Worth adding for any home with a basement, especially a finished one.

4. Mold

Excluded outright in most policies, or capped at $5,000-10,000 if mold develops as a secondary effect of an otherwise covered peril.

What it means: mold growth from any cause is generally not covered. If a covered loss (e.g., a burst pipe) causes water damage that later grows mold, some policies will pay for limited mold remediation up to a small cap; many won't pay at all.

Dollar exposure: mold remediation runs $2,000-30,000 depending on extent and category (Cat 1 clean water, Cat 2 grey water, Cat 3 black water). Health-related liability claims add more.

The fix: mold endorsement ($100-300/year for $25,000-50,000 of coverage). Some carriers don't offer it; in those cases, prevention (immediate professional drying after any water event) is your only protection.

5. Ordinance or law (code-upgrade costs)

Capped, often at 10% of Coverage A by default. "Ordinance or Law" is the cost to rebuild to current building code after a covered loss, and a 10% cap is rarely enough on older homes.

What it means: a 1955 home destroyed by fire often can't be rebuilt to its original specs because building code requires modern electrical, plumbing, insulation, and structural standards. Ordinance/Law coverage pays the additional cost of code-compliant rebuild. The base 10% cap is often blown through quickly.

Dollar exposure: $30,000-150,000 on older homes. The gap between original spec and modern code can be 20-50% of total rebuild cost.

The fix: Ordinance or Law (Increased) endorsement, typically $50-150/year to raise the cap to 25-50% of Coverage A. Worth strong consideration on any home built before 1990.

6. Wear and tear / maintenance / neglect

Excluded. Insurance covers sudden, accidental losses, not gradual deterioration.

What it means: a 30-year-old roof leaking from age is not covered. A water heater that finally fails after 18 years is not covered. A foundation crack from settling over decades is not covered.

Dollar exposure: variable. The exclusion is the reason hundreds of thousands of dollars of homeowner expense over decades is not insured.

The fix: home maintenance, plus an equipment-breakdown endorsement ($30-80/year) for HVAC, water heaters, and major systems. Equipment breakdown covers mechanical and electrical failure regardless of cause, which usefully supplements the wear-and-tear exclusion.

7. Pest infestation

Excluded. Termites, carpenter ants, rodents, bedbugs, and any other infestation are not covered for the damage they cause.

What it means: termite damage to framing, rodent chewing through wires, bedbug remediation costs — none of it is paid by the homeowners policy.

Dollar exposure: $5,000-50,000 for termite damage; $1,500-5,000 for serious rodent damage; $2,000-7,000 for bedbug remediation.

The fix: pest control contracts with annual inspections. The fix is preventive, not insurance. Some carriers offer narrow termite-damage endorsements, but coverage is rare and usually capped at $5,000.

8. War, terrorism, and nuclear hazard

Excluded. Acts of war (declared or undeclared), revolution, insurrection, and nuclear contamination are excluded.

What it means: damage from organized armed conflict or radioactive contamination is uninsurable in the standard market because the potential losses are catastrophic and correlated.

The fix: specialty insurance. Terrorism coverage exists for commercial properties; not generally available for residential. For residential, accept the exclusion.

9. Intentional acts

Excluded. Damage caused intentionally by an insured person is not covered.

The fix: none needed. Universal and reasonable.

10. Business activities at home

Generally excluded for any losses arising from business operations conducted at the home, including liability claims by clients or customers.

What it means: if you run a daycare, a salon, a yoga studio, or even an online consulting business out of your home, business-related claims may not be covered. The home-office exclusion was historically narrow; aggressive interpretations after the 2020-2024 remote-work shift have expanded it in some cases.

Dollar exposure: variable. A single liability claim from a home-business client can run $50,000-500,000+.

The fix: In-home business endorsement ($150-500/year) for low-risk businesses. Separate business owner's policy (BOP) for higher-risk operations. Discuss your specific business with the agent — the wrong endorsement leaves a gap.

11. Vehicles, watercraft, aircraft

Excluded. Cars, motorcycles, boats over a certain length, aircraft, and ATVs are not covered for physical damage under homeowners. Some narrow personal-property coverage exists for unlicensed vehicles used on the residence (e.g., riding lawnmowers).

The fix: separate auto, motorcycle, watercraft, or aircraft policies. The homeowners policy is not the right product for any of these.

12. Damage from power failure (when caused outside the residence)

Often excluded. If power fails on the utility side and the freezer thaws, ruined food may not be covered. If a covered cause of loss (lightning, vehicle striking utility pole) caused the power failure, then resulting damage is usually covered.

The fix: some policies include "refrigerated property" coverage by default (typically $500-1,000); others sell it as an endorsement ($20-50/year).

13. Foundation, underground pipes, sewer lines (the "service line" gap)

Generally excluded for damage to underground utility lines from the street to the house.

What it means: if a tree root cracks the sewer line under your front yard, repair cost ($3,000-20,000) is not covered by the standard policy.

The fix: service line endorsement ($30-80/year) covers underground water, sewer, and electrical lines from the street to the home. Worth carrying for older homes with clay or cast-iron sewer lines.

14. Smart-home and cyber losses

Generally excluded. Damage caused by smart-home device failure (a hacked smart thermostat that freezes pipes, for example), identity theft, ransomware, and most cyber events are not covered by standard property coverage.

The fix: identity theft endorsement ($25-50/year, usually $25,000-50,000 of coverage) handles ID theft resolution. Cyber/personal cyber endorsement ($25-100/year) handles cyber-bullying, online fraud, and limited ransomware. Coverage is still maturing in 2026.

Sub-limits that function like exclusions

Beyond the formal exclusions, every policy has sub-limits — caps on specific categories of personal property that are dramatically lower than the headline Coverage C number. These aren't exclusions, but they often produce "I thought I was covered" outcomes:

Jewelry, watches, furs: $1,500 total for theft (a single ring can exceed this)
Firearms: $2,500 for theft
Silverware, goldware, pewterware: $2,500 for theft
Electronics: $2,500-5,000
Cash, coins, precious metals: $200-500
Watercraft and trailers: $1,500
Business property at home: $2,500
Business property off-premises: $500

The fix: scheduled personal property (an itemized rider per item with appraised value) for high-value items. No deductible on most carriers; full replacement value paid.

Liability exclusions worth knowing

Section II of a standard policy has its own exclusions on the liability side:

Auto-related injuries and incidents (handled by your auto policy)
Boat and watercraft injuries above certain size/HP (separate watercraft policy)
Animal liability (many carriers exclude specific dog breeds entirely; others cap dog-bite coverage at $5,000-25,000)
Pollution / contamination (typical cleanup and third-party claims excluded)
Sexual abuse / molestation (almost always excluded)
Communicable disease transmission (excluded by most modern policies)
Acts in connection with business (see exclusion 10 above)

How to actually find your specific exclusions

Pull your declarations page — see the dec page guide for the walkthrough. The dec page lists every form and endorsement on your specific policy by 4-character code.
Look for endorsements that ADD coverage. These signal what's normally excluded. If you see "Water Backup Endorsement," that means the base policy excludes water backup. If you DON'T see it, you don't have coverage for water backup.
Look for endorsements that REMOVE coverage. Some endorsements quietly limit coverage. "ACV Roof Endorsement" replaces replacement-cost roof with actual cash value (see ACV vs Replacement Cost). Read every endorsement.
Read Section I — Exclusions in the underlying policy form. The standard ISO HO-3 form is publicly available; many state insurance department websites publish it.
Match exclusions against your home's actual risks. Basement → sewer backup. Older home → ordinance/law. High-value contents → sub-limits. Flood zone → flood policy. Seismic zone → earthquake.

Related guides

Find your specific gaps

Run your policy through ReadMyPolicy. For $9.99 we read every exclusion, every sub-limit, every endorsement, and every form on your specific policy and tell you the dollar gap each represents. Output is a prioritized list of: (1) which gaps matter for your specific home, (2) which can be closed cheaply via endorsement, and (3) which require separate policies.

For state-specific coverage gaps:

FAQ

Does homeowners insurance cover water damage? Sudden, accidental water damage from inside the home (burst pipes, failed appliances, overflow) is generally covered. Flood from outside the home is excluded. Sewer backup is excluded by default but covered with a small endorsement. Slow leaks and seepage are excluded as wear-and-tear.

Is mold covered by homeowners insurance? Mostly no. If mold develops as a result of a covered loss (a burst pipe causing water damage that grows mold, for example), some policies will pay for limited remediation up to a cap of $5,000-10,000. Mold from chronic moisture, humidity, or unidentified causes is generally excluded outright.

Does homeowners insurance cover earthquake damage? No. Earthquake and earth movement are excluded from standard homeowners policies in every state. Earthquake coverage requires either a separate earthquake policy or, in some states, an earthquake endorsement on the homeowners policy.

What about hurricane damage? Hurricane wind damage is generally covered, often subject to a separate, higher hurricane or named-storm deductible (usually 2-10% of dwelling coverage). Hurricane storm-surge damage is treated as flood and is excluded; a separate flood policy is required.

Is termite damage covered? No. Termites and other pest infestations are excluded from every standard homeowners policy. Annual termite inspections and pest-control contracts are the only protection.

Are home businesses covered? Mostly no. The standard homeowners policy excludes losses arising from business activities at the home. An in-home business endorsement ($150-500/year) covers low-risk operations; higher-risk businesses need a separate Business Owner's Policy.

Is identity theft covered? Not by default. Identity-theft endorsements ($25-50/year) cover resolution costs, lost wages, and limited expenses up to $25,000-50,000. Worth adding given the low cost.

What's a sub-limit, and how is it different from an exclusion? A sub-limit caps the payout for a specific property category (jewelry, firearms, electronics) at a number lower than your overall personal-property limit. The category is technically covered, but the cap may pay much less than the actual loss. Sub-limits aren't exclusions, but they function like them on high-value items.

Can I add coverage for everything that's excluded? Not everything. Flood, earthquake, and major business operations require separate policies; mold, pest damage, and a few others have limited or no endorsement options. Most other exclusions can be re-bought through endorsements at $20-200/year each. The total cost of closing the typical 4-5 most-relevant gaps is usually $200-600/year.

How do I know if my policy has an endorsement that ADDS coverage vs one that REMOVES it? Read each endorsement form code. Most carriers publish form indexes. Common ADD-coverage endorsements: HO 04 16 (premises alarm), HO 04 90 (replacement cost contents), HO 23 33 (water backup). Common REMOVE-coverage endorsements: ML 13 10 (ACV roof), HO 23 71 (wind/hail exclusion). When in doubt, ask the agent or run the policy through our tool.

My agent said my policy has "comprehensive coverage." Does that mean nothing is excluded? "Comprehensive" is a marketing term, not a coverage term. Every standard homeowners policy has the 14 categories of exclusions described in this guide, regardless of marketing language. Read the policy or run it through an analyzer to find your actual exclusions.

About this guide

This guide describes exclusions on standard ISO HO-3 homeowners forms most US carriers use. Form codes referenced are real ISO codes; dollar exposures are typical 2026 industry ranges, not specific reported claims. Real events referenced (Hurricane Helene flooding) are public-record facts, but the per-household dollar examples are illustrative. State-specific patterns reflect 2024-2026 carrier practice and vary in detail. Sub-limit and endorsement costs are typical premiums, not quotes. This guide is informational, not insurance advice — for decisions on your specific policy, consult your licensed agent or your state department of insurance. Last reviewed: 2026-04-26.