Homeowners insurance is supposed to cover general risk. But over the years they have become increasingly aggressive at lobbying state insurance commissions to accept more and more exclusions to standard policies. This behavior correlates with a shift from mutually owned companies to corporate entities.
They are scum because they happily collect their premium, and actively undercut the costs of the policies to maintain profitability in the short term. They also screw with people for claims they owe. In a case I'm aware of near my home, the insurance company low balled a fire claim by 30% for quick settlement, forcing the homeowner to roll the dice in arbitration.
The true villain in this story is the home inspector who was incompetent enough to miss a decommissioned upfeed hot-water heating system, a sure indicator of the presence of elemental mercury in the home.
Home inspectors are by and large useless. They exist because the laws say they must exist, but they don't have a strong regulatory body making sure that they're competent. Once the house is sold they're gone.
For the most part they're just yet another guy who takes a cut whenever a house is sold.
Isn't a situation like this exactly the reason why one would have insurance in the first place? What other options does a homeowner have? Is there some second insurance policy they can buy to cover the numerous holes in the first?
Of course, its important to distinguish this situation from cases where the insurer did agree to cover it, but refuses to pay anyway.