Eight Things Homeowner's Insurance Doesn't Cover

Sometimes it takes getting hit by a hurricane to realize what your homeowner's insurance actually covers.

Despite all of the press about lawsuits against insurers related to damage wreaked by Hurricane Katrina in 2005, a surprising number of homeowners are still pretty clueless, according to a recent survey by The National Association of Insurance Commissioners.

About two-thirds of homeowners and three-quarters of businesses did not have the additional coverage necessary to cover flood losses from flooding.

"Flood damage hasn't been part of standard policies since 1968," says Florida Insurance Commissioner Kevin McCarty. "This disaster [in New Orleans] brought to the forefront the importance of having an all-peril policy."

At least it was supposed to.

The NAIC surveyed 673 insured homeowners and found that a large percentage of them mistakenly believe that standard homeowners insurance protects them from a wide array of perils.

Perhaps the most surprising result is that one-third of respondents believed their homeowner's insurance covered them in event of a flood, when in reality it did not.

This ignorance can be dangerous: the annual average damage due to flooding in the U.S. is more than $2.4 billion, according to the National Flood Insurance Program.