Home insurance exclusions

Avoid nasty surprises when it comes time to file a claim.

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When choosing homeowners insurance it’s as important to look at what a policy doesn’t cover as what it does. Just like any other form of insurance, home and personal property policies feature general exclusions — events when claims won’t be paid.

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8 types of home insurance claims you might not be covered for:

Flooding and storms
Earthquakes, landslides and sinkholes
Damage from neglect or wear and tear
Intentional damage
Nuclear damage
Acts of war

1. Flooding and storms

Many people assume flood coverage is automatically included in homeowners insurance, but this is often not the case. A significant proportion of policies only offer flood coverage as an extra-cost option or not at all. Some providers partner with NFIP (National Flood Insurance Program) to offer flood coverage add-ons.

Many standard policies will also exclude coverage for damage resulting from a power surge or storm-related damage, such as removing trees from your property. If you live in a flood or storm-prone area it’s essential to read the fine print to find out exactly what a policy covers.

2. Earthquakes, landslides and sinkholes

Coverage against natural disasters is limited, as seen with flooding and storms. Earthquakes, landslides and sinkholes along with other shifts in the land are considered earth movements, and are often excluded.

3. Damage from neglect or wear and tear

Damage from not maintaining water fixtures, sewage backups, slow water leaks over time and damage resulting from normal use aren’t covered under the majority of home insurance policies. In general if it’s a sudden break, it should be eligible, unless it’s something you could have prevented by better maintaining the property.

4. Infestation

Insect and vermin infestations are excluded from many homeowner insurance policies. If you have unwanted guests, it’ll be on you to cover the costs of getting rid of them and cleaning up.

5. Mold

Mold issues typically result from unwanted water and moisture buildup. This can cause it to be a result of a failure to maintain the home properly. Make sure to keep proper humidity levels year round to avoid having to deal with this threat to your health and home.

6. Intentional damage

While this one may seem obvious, any malicious or intentional damage done to the structure isn’t covered by homeowners insurance. If you’re found to have purposefully damaged your home and file a claim, it can result in you being charged with insurance fraud.

7. Nuclear damage

The perils typically covered under homeowners insurance do not include nuclear events. That means you likely won’t be able to file a claim for any damage due to nuclear accidents or nuclear hazardous material brought on the property.

8. Acts of war

Damage as the result of invasions, revolutions and acts of terrorism won’t usually be included when it comes to homeowners insurance. If the damage is caused by a riot or other civil disturbance, however, it’s usually covered.

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Why do insurers set coverage exclusions?

Exclusions are designed to eliminate risks that an insurer is unwilling to cover, but there are several reasons behind some of the general exclusions that apply to your homeowners insurance policy:

  • It would result in too many claims at once. Some risks can’t be insured against because they would affect an excessively large number of policyholders all at once. One example of this is the exclusion for loss or damage that occurs as a result of war.
  • They’re easily prevented. No coverage is provided if you fail to take reasonable steps to protect your home and personal effects from loss or damage.
  • They can be controlled through proper maintenance. Some risks aren’t covered because they occur naturally if your property is not properly maintained. That’s why wear and tear, mold and gradual deterioration are excluded from coverage.
  • They’re illegal. If your home is being used for an unlawful purpose and this leads to loss or damage, no coverage is available. So if you’ve set up an illicit lab in your spare room and it burns your house down, don’t expect any love from your insurer.
  • They’re an optional extra. Some risks will only be covered by your policy if you’re willing to pay an additional premium. This is because they pose an additional risk to the insurer, such as coverage for high-value personal effects.

Bottom line

As you can see, there are plenty of valid reasons why certain risks are excluded from homeowners insurance policies. By reading the details closely and getting a clear picture of what is and isn’t covered, you can take better steps to end up with the right amount of coverage.

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