What Homeowners Insurance Doesn't Cover

There is one sentence in a homeowners policy that decides more denied claims than any other, and almost nobody has read it. It sits at the top of the exclusions section, before the list of what is excluded, and it reads:

"We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss."

That is the anti-concurrent-causation clause, and it does something people find genuinely surprising when it is explained. It means that if an excluded cause contributes to a loss at all — even alongside a covered one, even in a chain where the covered cause came first — the whole loss can fall outside the policy. A hurricane arrives, the wind takes part of the roof, and the storm surge takes the ground floor. Wind is covered. Surge is not. That clause is why the two do not simply split the bill.

This article is about what a standard homeowners policy leaves out and what fills each gap. It is not a list of obscure edge cases: the two largest exclusions are flood and earth movement, which between them account for a very large share of catastrophic residential loss in the United States, and both are excluded on every standard form.

A note before you start. This is general education, not insurance advice, and it describes the ISO Homeowners 3 – Special Form (HO 00 03), which is the industry-standard form most US homeowners policies are built from. Many large carriers write their own proprietary forms instead, so treat this as a reference point for how the coverage is normally structured rather than a description of the policy you hold — your declarations page and policy booklet are the only authority on that. Where a state overrides the standard treatment, the article says so and cites the statute. Dollar figures for the National Flood Insurance Program are statutory and current; premium and rebuild-cost figures are averages computed across this site's own sourced 50-state dataset, and your own numbers will differ.

1. The clause that changes how every other exclusion works

Read the exclusion lead-in again, because the ordinary reading of an insurance policy assumes it does not say this.

Most people assume exclusions work item by item: a covered cause pays, an excluded cause does not, and where both are present you get partial payment. Anti-concurrent causation says otherwise. If an excluded peril contributed to the loss, the loss is excluded — full stop — no matter what else contributed, and no matter what order things happened in.

The practical effect shows up hardest in wind-and-water events. Consider a coastal home in a hurricane:

• Wind removes shingles and rain enters through the opening. Covered — this is wind damage.
• Storm surge floods the ground floor. Not covered by the homeowners policy, because surge is water.
• Both happen to the same structure in the same event, and the damage is hard to separate. This is where claims are fought, and where the anti-concurrent-causation clause gives the insurer a strong position on the parts that cannot be cleanly attributed to wind.

This is not a reason to distrust your policy. It is a reason to understand that "I have homeowners insurance and I have wind coverage" is not the same as "I am covered for what a hurricane does to my house." The gap has a name and a fix, and both are below.

2. Water: much broader than the word "flood"

The water exclusion is the one people underestimate, because they hear "flood" and picture a river. The form is considerably wider than that. It excludes:

"Flood, surface water, waves, including tidal wave and tsunami, tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind, including storm surge."

And it keeps going, adding sewer and drain backup, sump pump overflow, and subsurface water — water below the surface pressing on or seeping through foundations, walls, floors, and basements. It extends explicitly to water escaping "for any reason" from a dam, levee, or seawall.

Break that into the things that actually happen to houses:

Two of those deserve attention because they are so common.

Surface water catches the loss most people would never call a flood. Heavy rain, saturated ground, water sheeting across a yard and in through a door or window well. No river, no flood zone, no warning — and no coverage, because the policy does not require a body of water to be involved.

Sewer and drain backup is a frequent, unglamorous, expensive claim, and it is excluded from the base form. It is also one of the cheapest endorsements available. If you have a finished basement and you have never checked whether you carry water-backup coverage, that is the single most useful thing this article can send you to look up.

Regulators say the same thing in plainer language. The NAIC's consumer guide states that "perils commonly excluded are flood and earthquake" (NAIC, A Consumer's Guide to Home Insurance), and North Carolina's Department of Insurance tells homeowners directly that most policies "do not protect you against losses from floods, earthquakes, mudslides, mudflows or landslide[s]" (NC DOI).

3. Earth movement: not just earthquakes

The second major exclusion covers ground that moves, and it is written broadly:

• Earthquake, including land shock waves or tremors before, during, or after a volcanic eruption
• Landslide, mudslide, or mudflow
• Subsidence or sinkhole
• "Any other earth movement including earth sinking, rising or shifting"

That last catch-all is doing a lot of work. Soil settling under a foundation, expansive clay heaving a slab, a hillside creeping — all of it lands in the same exclusion as a magnitude-7 earthquake.

There is one important carve-back: fire, explosion, or theft resulting from earth movement is covered. If an earthquake ruptures a gas line and the house burns, the fire damage is a covered loss even though the earthquake was not.

Earthquake coverage is bought separately, either as an endorsement or a standalone policy, and it typically carries a percentage deductible of its own rather than your flat all-perils figure.

Sinkholes, where Florida is different

Florida legislated around this. Fla. Stat. § 627.706 requires every property insurer in the state to provide catastrophic ground cover collapse coverage, and to make available sinkhole coverage for an additional premium. The two are not the same thing: catastrophic ground cover collapse requires the kind of dramatic, visible collapse most people picture, while ordinary sinkhole activity — the slow structural damage that is far more common — is the optional coverage.

The statute also permits residential sinkhole deductibles of 1%, 2%, 5%, or 10% of dwelling limits, which on a $400,000 home is between $4,000 and $40,000.

4. What flood insurance actually pays, and what it doesn't

If flood is excluded, the answer is a separate flood policy — usually from the National Flood Insurance Program, sometimes from a private carrier. It is worth knowing exactly what the NFIP does and does not do, because it is more limited than most buyers expect.

The limits are statutory, and they have not moved since 1994

Those figures come from the regulation at 44 CFR § 61.6, and the underlying authority is 42 U.S.C. § 4013, where the dollar amounts were last amended in 1994. They are not indexed for inflation and they do not change with your home's value. They change only when Congress changes them, and it has not.

Set that against this site's own sourced data: the average rebuild cost across the 50 states is $237 per square foot, ranging from $200 in Mississippi to $330 in Hawaii. At the national average, $250,000 of NFIP building coverage rebuilds roughly 1,050 square feet. For a great many houses, the maximum federal flood policy is not full coverage — it is partial coverage with a cap, and the excess-flood market exists precisely because of that.

The 30-day wait, and its three real exceptions

An NFIP policy generally takes effect 30 days after purchase. The regulation is 44 CFR § 61.11(d), and it provides exactly three exceptions:

1. A 1-day effective date during the 13-month period following the effective date of a revised flood map for the community.
2. No waiting period where the purchase is in connection with the making, increasing, extension, or renewal of a loan — effective at loan closing.
3. A 1-day effective date for post-wildfire flooding on federal land, if purchased within 60 days of the fire being contained.

Note what is not on that list. There is no "no wait at renewal" exception; § 61.11(e) says added or increased coverage mid-term is subject to the waiting period. And there is no exception for a storm in the forecast. Flood insurance is bought long before you need it or it is not bought at all.

The gap almost nobody knows about

NFIP policies pay nothing for loss of use. The Standard Flood Insurance Policy's Dwelling Form excludes "loss of use of the insured property" and "any additional living expenses incurred while the insured building is being repaired or is unable to be occupied for any reason."

Think about what that means in practice. A family whose home floods is out of the house for months. Their homeowners policy has loss-of-use coverage, but it does not respond, because the cause was flood. Their flood policy responds to the building and the contents, but it explicitly does not pay for anywhere to live. Every hotel night, every month of rent, every restaurant meal above their normal grocery bill comes out of their own pocket. Private flood policies sometimes cover it; the federal program does not.

One timing note worth carrying: the NFIP's authorization has been extended repeatedly on short cycles, and the program cannot sell or renew policies during a lapse. FEMA's own pricing methodology page describes the current rating approach, which was phased in between October 2021 and April 2023. Check the program's current authorization status before assuming a policy can be bound on any particular date.

5. Ordinance or law: excluded, then 10% given back

This one is subtle and it bites hardest on older houses.

The standard form excludes the cost of complying with any ordinance or law that regulates construction, demolition, remodeling, renovation, or repair — including the removal of resulting debris — and any loss in value caused by such a law.

It then gives some of it back as an additional coverage: up to 10% of your Coverage A limit for the increased costs of complying with such an ordinance when repairing a covered loss.

Why this matters: a house built in 1978 was built to 1978 code. When a covered loss damages half of it, you do not get to rebuild that half to 1978 code — the building department requires current code. Current code may mean a different electrical system, hurricane strapping, updated egress, insulation standards, or a full sprinkler requirement. The difference between "restore what was there" and "build what is now required" is the ordinance-or-law gap, and 10% of your dwelling limit is frequently not enough to close it.

There is an endorsement that raises the 10% in increments, commonly up to 100% of Coverage A. On an older home in a jurisdiction that has updated its code substantially, it is one of the highest-value endorsements available and one of the least discussed.

6. The sub-limits inside your contents coverage

Your personal property limit is not one number. Inside it sit per-category caps that apply no matter how much total coverage you carry, and the current standard form's figures are:

Two things people routinely get backwards.

Most of these are theft-only caps. Jewelry, furs, firearms, and silverware are limited for loss by theft. If a fire destroys the same items, they are covered against your full contents limit. That distinction is exactly what tells you whether scheduling an item is worth it: scheduling buys theft coverage, and usually mysterious disappearance too, which the base policy does not cover at all.

Money and securities are capped for any cause. Cash burns in a fire and you recover $300 of it. That is the lowest limit in the policy and it applies universally.

These figures come from the current edition of the standard form, which raised nearly every category from the previous edition — a good deal of material online still quotes the older, lower numbers. Your own carrier may write different amounts. Check the declarations page.

7. The everyday exclusions nobody argues about

Beyond the big two, a standard policy excludes a set of things that are excluded because they are not insurable events — they are the cost of owning a building.

• Wear and tear, deterioration, and marring. A roof that reaches the end of its life is a maintenance expense.
• Mechanical breakdown. An appliance that fails is not a covered loss, though equipment-breakdown endorsements exist.
• Neglect. Failing to take reasonable steps to preserve property after a loss.
• Rot, mold, and fungus, generally, with narrow carve-backs and a sub-limit where any coverage exists at all.
• Insects, birds, rodents, and vermin. Termite damage is not an insurance claim.
• Settling, cracking, shrinking, bulging, or expansion of pavements, foundations, walls, floors, roofs, or ceilings.
• Intentional loss by an insured.
• Government action, including seizure or destruction by order of a public authority.
• Nuclear hazard and war.

The pattern is consistent: insurance pays for sudden and accidental events, not for the predictable consequences of time. It is worth knowing where that line sits, because arguing about a maintenance claim is how relationships with carriers go wrong.

8. What actually fills each gap

Here is the whole thing as a decision list.

Work down that list against your own declarations page once, and you will know more about your coverage than most homeowners ever do.

Frequently asked questions

Is flood really excluded from every homeowners policy? From every standard one, yes. Flood is excluded on the standard homeowners form, and the exclusion is written broadly enough to catch surface water and storm surge as well as river flooding. A handful of private carriers now bundle limited flood coverage into a homeowners product, but it is an addition, not the default.

My house is not in a flood zone. Do I need flood insurance? Being outside a mapped high-risk zone means your lender does not require it, not that water cannot reach you. Surface water — rain running across the ground and in under a door — is excluded from your homeowners policy regardless of what zone you are in, and a meaningful share of flood claims come from outside high-risk areas.

Can I buy flood insurance when a storm is coming? Effectively no. The NFIP has a 30-day waiting period, and the three exceptions in the regulation are a recent map revision, a loan closing, and post-wildfire flooding on federal land. A forecast is not one of them.

Why doesn't my flood policy cover a hotel while the house is repaired? Because the federal policy form excludes it outright — loss of use and additional living expenses are both named exclusions. Your homeowners policy does have that coverage, but it does not respond when the cause of loss was flood. Private flood policies sometimes fill the gap; the NFIP does not.

What is anti-concurrent causation in plain terms? It means that if an excluded cause contributed to your loss, the loss can be excluded even though a covered cause also contributed. It is why a hurricane claim involving both wind and storm surge is harder than "the wind part gets paid."

Is sewer backup covered? Not on the base form. It is excluded along with the rest of the water exclusion, and it is added back by a water-backup endorsement, which is inexpensive and very commonly missing from policies on homes with finished basements.

My contents limit is $250,000. Why would jewelry only be covered for $2,000? Because sub-limits sit inside the contents limit rather than beside it. The overall figure is a ceiling on everything; the sub-limit is a separate cap on that category. For jewelry, furs, firearms and silverware the cap applies to theft specifically — a fire loss on the same items is subject to your full contents limit.

Does an umbrella policy cover any of these gaps? No. An umbrella extends liability limits — what you owe someone else — and does nothing for damage to your own property. It is a valuable policy for a different risk entirely.

What to do next

The fastest way to find out where your own gaps are is to read your declarations page against the standard structure. The coverage check calculator walks all six limits — dwelling, other structures, personal property, loss of use, liability, and medical payments — and flags anything sitting below what a typical policy carries, including the liability limit that passes every check and is still the biggest exposure most policies contain.

• Replacement cost calculator — whether your dwelling limit would actually rebuild the house, and what the 80% coinsurance rule costs if it wouldn't
• Deductible comparison — what a percentage storm deductible comes to in real dollars
• Premium estimator — what coverage costs in your state, from sourced averages
• How our figures are sourced

This article is general education about how standard homeowners policies are structured, not insurance advice, and no policy is being interpreted for any particular reader. It describes the ISO Homeowners 3 – Special Form; many large carriers use their own proprietary forms, and coverage terms vary by carrier, by state, and by endorsement. National averages are computed from this site's own sourced 50-state dataset. Your declarations page and policy booklet govern your coverage — read them, and take specific questions to a licensed agent in your state.