Why Doesn’t Homeowners Insurance Cover Every Repair?

It is important to understand how this policy works.

Key point

  • Homeowners insurance is supposed to pay for damage to your home.
  • It’s not supposed to pay for the usual wear and tear.
  • Plus, in some cases, it may not make sense to file a claim for covered problems if the repair cost equals the policy deductible.

When my friends bought a house a few years ago after renting their entire life, they knew to set aside some money in a savings account for home improvements. But when their water heater stopped working more than a year after they moved in, they were shocked to learn that their homeowner’s insurance policy would not pick up the tab.

I’m not at all surprised to hear that. In fact, many people I know have major misconceptions about home owner insurance. And one of them is that it will cover every expense associated with the house. But it couldn’t be more wrong.

This is not coverage for every little thing

You probably pay a fair amount of money for homeowners insurance, regardless of where you live. In fact, Progressive prices range from $999 to $1,655 for a 12-month policy effective on or after April 1, 2020. However, even if your fees veer to the higher end of that range, that doesn’t mean your policy will pay for everything. you expected it.

Your homeowner’s insurance policy will generally offer several types of coverage. You’ll usually be covered in the event of property damage, such as from a weather event (although you won’t always be covered in the event of a flood unless you have a separate flood insurance policy).

You also generally have liability coverage that covers you if someone is injured on your property. And you’ll often have theft protection, at least to some degree.

But homeowners insurance is not like health insurance. With health insurance, you are expected to show your insurance card whether you are rushed to the hospital for emergency surgery or you go to the doctor to follow up on a condition that you have had for years. Your health insurance company even takes the tab for preventative care, such as an annual physical.

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Homeowners insurance is not used every time something needs to be repaired or taken care of inside your home. So if your home is burglarized, your insurance coverage will usually kick in. The same is true if a tree falls onto your roof and causes damage.

But one thing your homeowner’s insurance policy doesn’t cover is wear and tear. It’s not designed to do that. And many of the home-related costs that property owners face have to do with wear and tear.

So, back to my friend’s water heater problem. If someone broke in and stole their water heater, their insurance company would probably pay something else. But because their water heater stops working over time due to age, they can’t make a claim against their homeowner’s insurance.

You should also know that in some cases, it may not pay to make a claim against your homeowner’s insurance policy, even if the matter is covered. That’s because you have to meet the deductible with every claim. And if your deductible equals the total bill, then you’re generally better off paying for the repair out of pocket. File too many claims, and your homeowner’s premiums can start to skyrocket.

Know your policy rules

Not only won’t your homeowner’s insurance policy cover wear and tear, but it probably won’t cover things like earthquake damage and sewer backup. It’s important to familiarize yourself with the terms of your particular policy so you know what to expect from it.

Our picks for the best homeowners insurance companies

There are many home owner insurance companies to choose from. We’ve researched dozens of options and created a short list of our favorites Here. Looking for eco-building discounts or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get offers today.

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