Homeowners insurance exclusions

What are homeowners insurance exclusions?

Your homeowners policy lists specific types of perils (things that can damage your home) listed as exclusions. That means that if damage occurs due to one of these perils, insurance will not cover the repairs.

“Understand that generally homeowners insurance starts broad by listing what is covered, then it's narrowed by exclusions,” says Evan Walker, owner at The Law Office of Evan W. Walker.

Most homeowners insurance policies have the same exclusions, but it’s important to read your policy to be sure of what’s covered.

Floods

A flood caused by a source outside your home, such as a natural disaster, is excluded from standard homeowners insurance policies. You may be able to add coverage for floods as an endorsement, which carries an extra cost, but most people have to purchase separate flood insurance.

Earthquake or earth movement

Like floods, earthquakes or damages caused by earth movement, like mudslides, are typically excluded from homeowners insurance. Here too, you can purchase an endorsement or separate earthquake insurance policy.

Maintenance

While proactive maintenance on your home can potentially help you save money by avoiding bigger issues down the road, homeowners insurance generally excludes maintenance costs. You’re responsible for the maintenance of your home.

Foundation issues

Your home’s foundation might be covered if it gets damaged due to a covered peril like a fire. However, normal wear and tear, like your foundation sinking or cracking over time, is generally excluded.

Intentional loss

If you intentionally damage your home, the damage will be excluded from insurance coverage, even if it would have otherwise been covered. You may also face legal penalties if you attempt to file a claim for purposeful damage, as it’s considered fraud.

Pest or animal damage

If a pet or animal damages your home, insurance won’t cover it. That includes pests like rodents and termites.

Animal damage from a pet, such as a dog bite, is a different story. Home insurance generally covers liability for pets.

“Most homeowners policies cover liability. The policies generally cover liability arising from pets. A lot of those policies, however, exclude liability arising from dogs of a certain breed,” says Walker. “If the policyholder lives in a rural area and has farm ‘pets,’ there may not be coverage for liability arising from those ‘pets.’”

Home-based businesses

If you have a home-based business, liability arising from that is often excluded from standard homeowners insurance policies. Having a home-based business without telling your insurer can even risk voiding all coverage due to business-related damage or liability. However, you can add business coverage to your standard homeowners policy by informing your insurer and paying more.

High-value items

Homeowners policies typically limit personal property coverage, so if you have high-value items, like expensive jewelry or artwork, those items might not be covered in full by a standard policy. Instead, you should protect these items with separate coverage, known as a high-value item floater.

Mold or fungus

Depending on the cause of mold or fungus growth, these issues might be excluded from your homeowners insurance policy. If the mold occurs due to the gradual effects of living in a humid area, for example, it will be excluded. But if it’s caused by a burst pipe, it might be covered. Essentially, if the mold grows as a result of a covered peril, it’s likely to be covered. Some companies do have special limits on mold.

Theft, vandalism and frozen pipes in vacant houses

Many homeowners insurance policies consider a house vacant if it’s empty of people and property for 30 or more days, though you should check the specifics with your insurer. If your home is considered vacant, however, issues that might otherwise be covered, like theft, vandalism, and frozen pipes, will be excluded.

Wear and tear

Living in your home results in normal wear and tear over time. Daily living can cause floors to scuff, paint to chip, hinges to break, etc. And, as a homes ages and stands through seasons and use, it slowly degrades. Wear and tear is typically excluded from homeowners insurance coverage, which is designed for unexpected damage.

Pollution and corrosion

Environmental issues like pollution and corrosion can damage your home over time, such as if metal fixtures or pipes start to rust. However, these issues are typically excluded from homeowners insurance coverage.

Power failure

Power failures can be a tricky area when it comes to homeowners insurance coverage. Your policy may have some exclusions, like covering the costs of food or lodging if you lose power due to utility maintenance. However, your policy might still cover certain perils stemming from a power failure, such as if heat loss causes pipes to freeze. It may also depend on the source of the power failure.

Mechanical breakdown

If you experience mechanical issues in your home, like appliances breaking down or HVAC systems failing, those are excluded from your homeowners insurance coverage. Instead, you might need a home warranty plan for this type of financial protection.

There are many potential homeowners insurance exclusions to be aware of. Carefully reviewing your policy and looking into alternatives will help protect your home and finances in the future.

“Make sure you understand what is covered and what is excluded,” says Walker. “You should consider buying coverage for excluded perils if you think your home is at risk for those perils.”