What Your Homeowners Insurance Probably Doesn't Cover

Having homeowner's insurance is a smart move — and often required if you have a loan on your home. It covers you from worst-case scenarios and gives you peace of mind. A typical homeowner's insurance policy will help pay for damage to your home or theft from it. Insurance can also protect you if someone sues you after getting hurt on your property.

But there are certain things that aren’t covered in most policies that might surprise you. Here are six additional homeowner's insurance options to consider adding to your plan.

1. FLOOD INSURANCE

   Even though homeowner's insurance protects your home against natural disasters, such as fires or storms, floods and earthquakes are not usually included. Most policies will cover flood damage if the water seeps in after a storm damages your roof. But if the flooding comes from the ground, you’re out of luck without flood insurance. Not sure if you really need it? Check out the Federal Emergency Management Agency’s flood hazard map to see if your home is in an area at risk for flooding.

2. EARTHQUAKE INSURANCE

   Some insurers allow you to add earthquake insurance to an existing policy (for an extra fee, of course), while others offer it as a separate policy. Paying for earthquake insurance isn’t essential, though it’s a good idea if you live in an earthquake-prone area, such as California. Insurance will help you replace or rebuild in the event a quake damages your home or your belongings inside.

3. HOME-BASED BUSINESS INSURANCE

   Not to burst your entrepreneurial bubble, but you may need to pony up for extra insurance if you’re running a business out of your home. Picture this: A client comes to your house for a meeting, slips on your stairs and ends up in the hospital with broken bones. Should he or she decide to sue, you likely won’t be able to rely on your homeowner's insurance to cover your costs.
   
   
   
   RELATED CONTENT: Want to learn more about this topic? Our complete guide to buying a home can help you prepare for one of the largest purchases you’ll ever make.

   There are a few policy options for a home-based business, including a rider to your current homeowner policy, an in-home business policy and a business-owner’s policy, each of which offers varying amounts of protection.

4. UMBRELLA POLICY

   These policies protect you in case you’re brought into a lawsuit that falls outside of or beyond the coverage offered by your homeowner's or auto insurance. An umbrella policy can help cover costly expenses, such as lawyer fees once your home-based business insurance has reached its max in the client-slipping scenario mentioned above.

5. CONDO INSURANCE

   Living the condo life? Your association fees help cover the insurance for your building and its common areas, but everything inside your unit is up to you. By purchasing a condominium owner policy (called an HO-6), your cabinets, appliances and fixtures, as well as your personal belongings, will be protected from damage or theft.

6. ADDITIONAL COVERAGE FOR VALUABLES

   Your homeowner's insurance will protect many of your personal items, but only to a certain extent. You may want to consider adding a rider, an add-on provision to your policy, to increase your protection for items of high value, such as an extensive wine collection, your grandmother’s furs or one-of-a-kind antiques. You can choose to purchase a rider for individual items, such as an engagement ring, or a blanket rider to protect a whole category of valuables, usually as long as no one item in the category is worth more than $2,500. Your insurer will place a price value on the item or items, and then you’ll pay a premium that can vary but usually amounts to about 1 to 2 percent of that value.