New York (CNN/Money) - State Farm Insurance, the nation's largest auto insurer, recently made headlines when it said it would not cover damages related to a nuclear explosion or radioactive fallout.
State Farm was actually behind the times. War and nuclear disaster have been excluded from most home and auto policies since the 1950s, according to Don Griffin, an assistant vice president for the National Association of Independent Insurers.
In fact, insurance contracts are shrouded by exclusions of all kinds, particularly when it comes to disasters that could affect many people at one time and potentially bankrupt the insurer. "There is no such thing as an all-risk policy," said Eric Loewe, general council for InsWeb, and online insurance marketplace.
Since no policy covers every worst-case-scenario, it's your job to understand the limitations of your policy and, if it makes sense, buy extra coverage to protect you or your worldly goods against specific events. "You don't want to wait until after the fact to find out you're not covered," said Steven Paul, vice president with Insurance.com.
War, what is it good for?
Evidently, one thing it isn't good for is an insurance claim.
War, of all shapes and forms, is an area both homeowners and auto policies address in the fine print, with most excluding all losses related to war, undeclared war, civil war, insurrections, rebellion or revolution. "If the military needs to destroy your house or seize it for purposes of war, your insurance won't pay for the loss," added Griffin.
Discharge from a nuclear weapon, whether intentional or accidental, is also characterized as an act of war and typically not covered by insurers.
Now that terrorism is considered as much a risk as war or nuclear hazard, insurers have revised their policies to also exclude "certified acts of terrorism" from new policies or renewals.
"Most companies are giving homeowners the option to buy back that coverage for a very nominal amount," said Dennis Howard, founder of the Insurance Consumer Advocate Network and a former insurance adjuster.
Mother Nature at her worst
As a rule, earthquake and flood-related damage are not covered by standard homeowners policies. People who live in quake or flood zones usually know they need to buy extra insurance for such events. But people outside such areas often take for granted that they're insured against the unlikely event of a flood or tremor in their backyards.
"Hurricanes and tornadoes are covered, but over the past few years companies have modified their policies to say that with these events the deductible will be a certain percentage of the damage rather than the usual deductible," said Howard. "If a hurricane wipes out your house don't expect to only have to pay your $500 deductible."
Not every natural occurrence is off limits. Volcanic activity, unless it's caused by an earthquake, is generally covered by homeowners' policies.
Fire, whether it's a grease fire or a raging wildfire, is rarely excluded from insurance policies -- unless, of course, you intentionally start the blaze.
Protection for golf carts, not snowmobiles
Most of us rely on our homeowner's insurance to pay the damages if someone slips and breaks a leg on our staircase or is bitten by our dog. This protection may also apply if you hurt someone -- by accident, of course -- while on your bike, in your golf cart or doing certain other activities.
But there are limitations. For example, if you use your golf cart in places other than the golf course, which is common in retirement and resort communities, you'll need additional insurance for this sort of use. And while your homeowner's insurance will cover a guest's mishap on your modest-sized sailboat, you'll need specific insurance if the vessel is longer than 25 feet, according to Griffin.
Snowmobiles, ski boats and other vehicles with significant horsepower are typically not protected under homeowner policies.
The caveats of auto insurance
While auto policies typically exclude war and nuclear disasters, they do include damage brought on by natural disasters. So if an earthquake brings the roof of your house onto your car, the roof may not be covered but the car is if you have full coverage.
And while homeowner's liability protection does not cover injuries you or your family sustain on your property (or in your golf cart or on your sailboat), auto insurance includes all legitimate accidents sustained "in, on, entering or alighting from" the vehicle.
Of course, your definition of an "accident" may not be the same as your insurance company's. "I once reviewed an auto claim from someone whose 17-year-old daughter got pregnant in the back seat of his car," said Howard. "This person argued that related medical expenses should be covered because the 'accident,' after all, did occur in the car."
Something else to consider if your teenager is going to be driving the car is whether your policy is a family policy or named policy. If it is the former, anyone in the family or with your permission to drive your car is covered by the policy. If it is the latter, however, only those named specifically on the policy are insured.
A final caveat: While most insurers will cover your road trips into Canada, they typically don't insure the car for trips into Mexico. For a small fee, you can buy the extra coverage before you cross the border.