What Homeowners Insurance Does NOT Cover
Nobody likes finding out what their policy does not cover during a claim. So let's answer it up front, honestly. Smith Davis Insurance has been reading policies for families in Southwest Iowa and Eastern Nebraska since 1931, and the exclusions below are the ones that surprise people the most. The good news: almost every gap on this list has an affordable fix.
Does homeowners insurance cover flooding?
No. Flood damage, meaning water that rises from outside your home, is excluded from every standard homeowners policy. That includes river flooding, flash flooding, and heavy rain that pools and pushes in through doors or foundation walls. The Insurance Information Institute lists flood as the single biggest exclusion in home insurance.
Here is the part most people get wrong: you do not have to live next to the Missouri River to flood. According to FEMA's National Flood Insurance Program, floods caused more than $8 billion in damage to homes and businesses in 2024, and $3.8 billion of it, nearly half, happened in communities that are not considered high-risk. A separate flood insurance policy is the only way to cover this, and there is typically a 30-day waiting period, so it cannot be bought when the water is already rising.
Does homeowners insurance cover sewer or sump pump backup?
Not without an endorsement (an add-on that changes what your policy covers). If your sewer line backs up into the basement, or your sump pump fails during a storm and the basement takes on water, a standard policy pays nothing. Flood insurance does not cover it either.
The fix is a water backup endorsement. Nationally it runs about $50 to $250 per year for $5,000 to $25,000 in coverage. If you have a finished basement, we think this is the best money you can spend on your policy. A basement with drywall, carpet, and a family room can easily hold $30,000 to $50,000 of value, so ask about higher limits, not just the minimum.
Does homeowners insurance cover earthquakes or ground movement?
No. Earthquakes, sinkholes, landslides, and settling all fall under the earth movement exclusion. Earthquake coverage can be added by endorsement or a separate policy, and in Iowa and Nebraska it is usually inexpensive because the risk here is low. Foundation settling and cracking from soil movement is never covered, by any policy, because insurers treat it as a maintenance issue rather than a sudden accident.
What about wear and tear, mold, and pests?
Homeowners insurance is built for sudden, accidental damage: the hailstorm, the kitchen fire, the burst pipe. It is not a home warranty and it is not a maintenance plan. Damage that develops slowly is on the homeowner.
- An old roof that simply wears out, as opposed to one damaged by hail or wind
- Mold that grows from long-term humidity or a slow leak you did not fix
- Termites, mice, squirrels, and other pest damage
- Rusted water heaters, aging furnaces, and appliances that quit
- Slow plumbing leaks that seep for weeks or months before you notice
One important line to know: if a pipe bursts suddenly, the water damage is typically covered. If the same pipe dripped inside a wall for six months, most policies deny it as neglect. Finding leaks early is not just good home care, it protects your coverage.
Are jewelry, guns, and collectibles fully covered?
Only up to small built-in limits. Most policies cap theft of jewelry somewhere around $1,500 total, with similar caps on firearms, watches, furs, and collectibles. If your engagement ring is worth $8,000, a standard policy would leave most of that loss on you. The fix is called scheduling (listing a specific item on your policy with an appraised value), and it usually covers the item for more causes of loss, often with no deductible.
Is hail damage covered in Nebraska and Iowa?
Yes, hail and wind are covered, but read your deductible carefully. Around the Omaha metro, many carriers now use a separate wind and hail deductible that is higher than your regular deductible, sometimes a flat dollar amount and sometimes 1 to 2 percent of your home's insured value. On a $400,000 Papillion home, a 1 percent wind and hail deductible means the first $4,000 of a roof claim is yours. Hail is not excluded, but the deductible surprise feels like an exclusion when the adjuster's check comes in, so know your number before storm season.
How do you close these gaps?
Most exclusions exist so that everyday maintenance does not drive up everyone's premium, and the true catastrophe risks, like flood, get priced on their own. Here is how each gap gets handled, and roughly what the fix costs.
| Not covered by a standard policy | How to cover it | Typical cost |
|---|---|---|
| Flood (rising water from outside) | Separate NFIP or private flood policy | Varies by location; lower outside high-risk zones |
| Sewer or sump pump backup | Water backup endorsement | About $50 to $250 per year |
| Earthquake and earth movement | Earthquake endorsement or policy | Usually low in Iowa and Nebraska |
| Jewelry and valuables above policy caps | Schedule the items with an appraisal | Often $10 to $20 per $1,000 of value per year |
| Wear, tear, mold, and pests | Home maintenance; no insurance fix | Your time and upkeep budget |
What we see in Papillion and Sarpy County
Sarpy County is the fastest-growing corner of our footprint, and the newer neighborhoods around Papillion and Gretna share a pattern: beautiful finished basements sitting in the Papillion Creek watershed, all depending on one sump pump. When a summer storm stalls over the metro, that pump runs nonstop, and if it fails or the power blinks, the damage lands squarely in the two gaps this article covers: backup and flood. When our Papillion office reviews a policy from a homeowner who just moved in, missing or minimal water backup coverage is the single most common gap we find, and it is usually a $100-a-year fix. If you are in a newer Sarpy County build with a finished lower level, make that endorsement question one before the next storm season.
Frequently Asked Questions
Does homeowners insurance cover water damage at all?
Yes, but only sudden and accidental water damage from inside the home, like a burst pipe or a failed washing machine hose. Water that rises from outside is flood, water that backs up through drains is backup, and slow leaks are maintenance. Each of those three needs its own solution, which is why water claims cause so much confusion.
Do I need flood insurance if I am not in a flood zone?
It is worth pricing. FEMA reports that $3.8 billion of 2024 flood damage happened in communities not considered high-risk, and policies outside mapped flood zones are usually much cheaper. Remember the 30-day waiting period: the time to decide is before the forecast turns.
Who can look over my policy for these gaps?
Any independent agent can, and that is exactly what we do at our Papillion office for homeowners across Sarpy County. Bring your declarations page (the summary page of your policy) and we will show you what is covered, what is not, and what each fix costs across our carriers.
Standard policies exclude more than most homeowners realize, but none of these gaps has to stay open. A ten-minute review with an independent agent who represents multiple carriers, including our anchor carrier Auto-Owners, is the fastest way to find out where you stand. See our homeowners insurance page for what a well-built policy looks like.