My Home Insurance Didn't Cover My Recent Repairs. Here's Why

Home insurance can provide comprehensive coverage without covering everything.

I have very comprehensive homeowners insurance and I pay for more coverage than is required by my mortgage lender on my property. I do this to provide crucial protection for my assets.

Despite the fact that I have lots of different types of protections in place for my home, I recently had some repairs done and my insurer did not cover them. In fact, I didn't even try to ask my home insurance company to pay the tab. Here's why that's the case. 

Home insurance doesn't cover all problems that arise with the home

The reason that my home insurance coverage did not cover my recent repairs is because it was not intended to do so. See, my repairs related to my geothermal air conditioner. Specifically, a pump had stopped working properly, which for some reason caused the air conditioner to shut off after a limited period of time (what that reason is, I do not know, but I was assured this was the issue by my competent repair professionals). 

The pump breaking was not caused by any type of natural disaster or surprise event that my home insurance would cover. No fire or flood caused it, and no vandals came into my home to damage it. Instead, the pump broke because of routine wear-and-tear. And home insurance simply does not cover problems that occur for that reason, just as car insurance will not cover routine oil changes or new tires once the treads wear out. 

It's important to know coverage limitations

I was aware of the fact that my home insurance would not cover my A/C repairs. In fact, I know there are a lot of things my policy isn't designed to pay for, such as when my appliances reach the end of their shelf life or when I need new air filters for my HVAC system or if I decide to upgrade to energy efficient windows.

The reality is, the purpose of buying home insurance is to transfer the risk of loss caused by unexpected events. A fire or a pipe bursting and damaging the home are not things that you can predict, while appliances breaking over time is a natural part of life. Insurance is supposed to be there just in case something goes wrong, not to shield you from routine costs of living in the home.

Insurance is generally also designed to cover catastrophic damage, such as when a home is destroyed or major repairs are necessitated. That's why there are deductibles that must be paid out-of-pocket when an insurance claim is made -- and these deductibles sometimes add up to several hundred or even several thousand dollars. Because of the deductibles, it doesn't make sense to make insurance claims unless the losses are fairly substantial. 

It's not a problem that homeowners insurance doesn't cover basic issues that arise, because that's not what it is for. But it's important that those buying a policy know this, so they don't anticipate getting more protection than their policy actually provides. Paying insurance premiums isn't a substitute for saving for routine upkeep expenses. In fact, it's necessary to have a home maintenance fund and an insurance policy in place to ensure any issues that arise with a property can be resolved.