What are Exclusions in Homeowner’s Insurance?

Homeowner’s insurance is what we use to protect our most valuable asset and everything in it. Yet, most homeowner’s insurance policies do not cover you for everything. Coverage is defined by its “exclusions” and it’s important to understand them.

What is an Exclusion?

Exclusion is the insurance industry term for things your policy does not cover. There are three common policy types and exclusions will differ depending on which you carry.

Common Policy Types

Each company will offer its own variations of these policies. However, there are three standard policies. Each provides a different level of coverage.

H-01

H-01 policies are the most limited. They only cover you in the event of specific perils outlined by the policy. Because of their extensive limitations, they are the least popular policy option.

H-02

H-02 policies are commonly referred to as the broad form. Typically, they provide coverage against 16 different hazards. Anything not designated will be considered an exclusion. These are the most popular policy option for today’s homeowners.

H-03

These policies provide the most extensive level of coverage because there are fewer exclusions. You will still need to carefully read the policy, as they are not exempt from exclusions entirely.

Most Common Policy Exclusions

As stated previously, your exclusions will vary by policy. The following is a list of all the most common exclusions on modern policies. Check with your provider to verify which apply to you.

Ordinance or Law

Homes that are not build to code will face Ordinance or Law exclusions. You will not be covered if you are told that demolition is scheduled.

Earthquakes

Any type of earth movement is generally included in the terms of these exclusions. These include things such as mudslides and avalanches.

Water Damage

Whether the damage is from your plumbing or mother nature, it most likely won’t be covered by your policy. Check for this exclusion to know for certain.

Power Outage

If your property suffers damage due to a power outage, this exclusion denies coverage.

Neglect

As long as you follow reasonable maintenance practices, these won’t apply to you. When a property falls into disrepair, it could be denied coverage.

War

Typically, this exclusion does not require the war to be declared. The insurance company will be the final decision-maker as to whether the exclusion is applicable to a claim

Intentional Loss

When somebody tries to burn their own home down to make an insurance claim, then this exclusion would deny the claim.

Governmental Action

The insurance company will not be held liable for any of your claims if your property is seized through eminent domain.

Loss to Property

If you purchase the home and you suffer a loss to your property due to certain factors, your claim could be denied. For example, faulty construction is commonly included under this exclusion.

When you’re choosing your homeowner’s insurance policy, it is so important to make sure you know exactly which exclusions there are. Natural and unexpected disasters can occur at any time, and you won’t want to be stuck in such a situation.

If you currently have damage to your property and are searching for help with getting the maximum return from your insurance, reach out to us.

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