Holes: An In-depth Analysis

Holes can be filled with financial risk. What types of holes cause damage? And will our insurance pay? Here's what we found.

Sinkholes: Unfortunately for folks who live in prone areas, sinkholes are not covered by home insurance in the United States. Most standard home insurance policies have an exclusion for “earth movement” that includes earthquakes, land shockwaves, tremors from a volcanic eruption, landslides and mud flows. House damage caused by the “earth sinking, rising or shifting” is not covered unless it is directly caused by a fire or explosion.

See these other home insurance exclusions.

Pot holes:  These craterlike holes in the road can be a royal pain in the asphalt.  The damage to your car caused by potholes can be instantaneous, such as a punctured tire, or cumulative and costly, such as misalignments to the steering system. However, if you have collision coverage included in your auto insurance policy, pot hole damage is covered. Collision coverage, which is optional, reimburses you for damages to your vehicle caused by pot holes, according to the Insurance Information Institute. But remember that you'll have to pay your deductible.

Roof holes: If a meteor or tree punches a hole in your roof, your home insurance will pay for repairs. But if your roof hole is due to lack of maintenance, you're on your own.  

Bullet holes: If your neighbor decides to hold target practice in his backyard and a stray bullet pops your window or puts a hole into your house, home insurance would pay for the damage. However, your insurer is likely to go after your neighbor -- in the form of subrogation against your neighbor's insurance company - to recoup its expenses.  

In another scenario, if your car is the victim of a drive-by shooting and you have comprehensive coverage, it would pay for any bullet hole damage. However, coverage likely won't apply if you were involved in the shooting.

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