In most cases, the largest expenditure someone will make in their lifetime is purchasing a home. With this said, it is surprising how many people don’t take the time to learn what types of exclusions their homeowner’s policy can have, even though it affects their biggest investment. The exclusions section of your policy packet is the FIRST thing you should be looking into when you’re buying insurance. As most policies cover everything unless specifically excluded, we took a look at what some of these property exclusions could be, using a major carrier as our example. Here we go!
What your homeowner’s policy doesn’t cover
- Collapse. This includes any part of the structure falling down. This is typically not covered because it is usually caused by a lack of maintenance or maintenance failure.
- Freezing of plumbing, heating, air conditioning, sprinklers, or appliances. This does not apply if the user took reasonable precautions to keep them from freezing. Keep your heat on in freezing weather, even when you aren’t home!
- Theft in or to a dwelling under construction. This includes stolen supplies and materials used for construction, like a stack of bricks or 2X4s. To avoid this, you would need to purchase a builder’s risk insurance policy.
- Vandalism or mischief if the dwelling has been vacant for more than 30 days. For example, you may move into a new home while you’re waiting for your old home to sell, causing it to remain empty for 30+ days. Coverage would not apply if the vandalism took place after you had vacated the property.
- Continuous seepage or leakage of water/steam from an appliance. The best example of this would be a leak in your refrigerator’s ice maker. Since it would be leaking in the back, it would be easy for it go undetected. While it may be considered an exclusion, many companies will still cover it if you report the issue within 24 hours of discovering it.
- Wear, tear, marring, scratching, or mechanical break down of systems in the house. Under this policy, if your HVAC unit went out, you wouldn’t be covered and that expense would be yours. However, you can purchase this coverage separately!
- Corrosion, mold, or fungus. The only time coverage would apply is if it occurs due to a covered loss, like a busted pipe.
But wait… there’s more
- Settling, cracking, shrinking, bulging, or expansion of pavement, floor, roofs, or ceilings. Cracks caused by your house settling would not be covered. Construction in your area can also cause this, i.e. dynamite and earth movement, but is still not covered in your homeowner’s policy.
- Damage from birds, vermin, rodents, insects, domestic animals. Any damage they cause to part of the building is NOT covered, INCLUDING TERMITES. Make sure to get your bug guy out there for an inspection on the reg.
- Ordinance or law. There is no coverage for changes needed to the structure due to any ordinance a city passes. For example, there is no coverage if a city passes a law requiring sprinkler systems in new homes and rebuilds and you were to experience damage to due to a tornado. The extra cost of the sprinkler is your responsibility.
- Earth movement. Tremors, earthquakes, and sinkholes are all exclusions. There are separate policies available for this.
- Water Damage. Sound vague? It is. This can include flood, surface water, waves, tidal waves, tsunami, or an overflow from a body of water. You could purchase flood insurance to cover those instances. Fun fact: it’s only considered a flood if it affects more than 2+ acres of normally dry land; anything less and it’s considered surface water.
- Water from sewage or outside plumbing system. Most sewage backup will be excluded but you can purchase this coverage in addition to your homeowner’s.
- Neglect. If your property isn’t kept up with, insurance isn’t going to cover it.
- War. There will be no coverage for anything classified as an act of war.
- Nuclear Hazard. Any nuclear reaction, radiation, or radioactive contamination will not be covered.
Moral of the story: check your policy! CJ goes into even more detail in the video below https://vimeo.com/420057745