High-Level Overview of Exclusions in Homeowners Insurance Policies
Homeowners insurance policies include various exclusions that limit coverage in certain situations. Below is an overview of common exclusions categorized by general risks and conditions. We’ll break down each of these areas into additional articles with specific examples as well.
1. Climate Change-Related Exclusions
Long Term Climate Change: Damage resulting from gradual climate change, such as rising sea levels or increased temperatures, is not covered.
Flooding: Standard policies do not cover damage from flooding due to storms, heavy rain, or overflowing bodies of water.
Wind or Hail Damage: In some high-risk areas, wind or hail damage may be excluded or limited, requiring separate coverage.
Acts of God: Certain natural disasters, such as hurricanes or tornadoes, may have limited coverage depending on the location.
2. Government-Related Exclusions
War: Damage resulting from war or military action is excluded from coverage.
Terrorism: Losses due to terrorist acts are typically excluded, though some policies offer optional terrorism coverage.
Government Action: Losses caused by government actions, such as property seizure or Demolition, are not covered.
3. Environmental Exclusions
Nuclear Hazards: Damage from nuclear accidents or radiation is not covered.
Earthquake or Ground Movement: Damage from earthquakes, landslides, or sinkholes is excluded unless a specific Endorsement is added.
Pollutant Discharge or Seepage: Damage caused by pollution, including oil spills or toxic waste, is excluded.
Smog: Damage or deterioration due to smog is not covered.
Power Surges or Failures by Utility Company: Damage caused by power surges or outages not originating from the insured property is excluded.
Smoke, Smudging, or Staining from Agricultural Operations: Damage from agricultural smoke or other staining processes is excluded.
4. Maintenance-Related Exclusions
Infestations: Damage from pests like Termites, rodents, or insects is not covered.
Wear and Tear: Normal wear and tear, as well as maintenance-related issues, are excluded from coverage.
Intentional Loss or Neglect: Damage resulting from intentional acts or neglect by the homeowner is excluded.
Corrosion or Rust: Damage due to corrosion, rust, or other gradual deterioration is not covered.
5. Mold-Related Exclusions
Mold and Fungus: Coverage for mold and fungus is generally limited or excluded unless caused by a covered peril and discovered promptly.
Rot: Coverage for wet rot is also generally limited unless caused by a covered peril - such as rain intrusion during a windstorm - and discovered promptly.
6. Primary Dwelling-Related Exclusions
Backup of Sewer: Damage from sewer or drain backups is excluded unless a specific endorsement is added.
Mechanical Breakdown: Damage due to mechanical or electrical breakdown of household systems or appliances is not covered.
Settling or Expanding of Structures: Damage from settling, shrinking, or expanding of the home’s Foundation or walls is excluded.
Local Ordinance: Costs associated with bringing a property up to current building codes or local ordinances after a loss are typically excluded.
7. Uninhabited Property Exclusions
Theft to a Dwelling Under Construction: Theft from a home under construction is often excluded.
Vandalism to Long Term Vacant Property: Damage from vandalism to properties left vacant for an extended period (typically 30-60 days) is excluded.
8. Landscaping Exclusions
Landscaping: Damage to landscaping, including trees, shrubs, and lawns, is often excluded or has limited coverage in a standard Policy.
9. Personal Property Exclusions
High-Value Items: Coverage for high-value personal property such as jewelry, art, and collectibles is limited, requiring additional endorsements for full coverage. We’ll look into some additional examples here.
10. Business-Related Exclusions
Business Activities: Damage or liability arising from business activities conducted in the home is generally excluded unless home business coverage is added. This a broad set of exclusions that should be covered in advance through a series of endorsements.
11. Pet-Related Exclusions
Dangerous Dogs: Some policies exclude liability coverage for dog breeds deemed dangerous by the insurer.
Pet Damage: Damage caused by pets, such as chewing, scratching, or other destructive behaviors, is excluded from coverage.
Learn More
Understanding these exclusions allows homeowners to better manage risks and consider additional protections where necessary. The following chapter goes through each one of these areas to help inform new policy purchases as well as understand your current coverage if an incident was to occur today. Let’s get going…