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Exclusions Explained

| Feb 15, 2020 | Firm News

Somewhere deep in your homeowner’s insurance policy is the section entitled “exclusions.” This is the section where your insurance company tells you what they will not cover. Exclusions listed in an insurance policy are the opposite of what the insurance company will cover, which are referred to as “perils.”

Depending on your homeowner’s policy, you might have a few or many exclusions listed. H-O3 policies are relatively comprehensive, and cover many different perils with only a few exclusions. H-O2 is a widely used policy that covers 16 different perils. H-O1 is the most basic type and offers only a few perils covered with many exclusions.

The following are some examples of property-damage exclusions that you may find in your insurance policy:

Intentional acts by the insured that damage the property. Negligence might be otherwise covered, but anything intentionally done to effect a payout will be excluded in any homeowner’s policy.
Long-term water damage. While many insurance policies cover flood damage (if not, you can usually find a ride-along policy that will cover this), damage caused by a gradual buildup of water is a common exclusion in home insurance policies.
Defects of the structure or materials used. The notorious Chinese Drywall case is a particularly high-profile and widely reported manifestation of this exclusion. Unfortunately, this exclusion is often rather broad when it appears in an insurance policy. For instance, it can list planning, design, development, surveying, zoning, and many more factors as included in this particular exclusion.
Damage to property as the result of radiation. Even if the underlying cause of the radiation damage was an accident at a power plant or other completely unintentional act, there is a good chance that this is an exclusion in your homeowner’s insurance policy.
Valuable and high-cost items. Usually, insurance companies will pay up to a paltry $1,000 for high-cost assets like jewelry, diamonds, and art. So, this can be considered a limit instead of an exclusion, but the limit is exceptionally low relative to the value of these items.
An act of war. This is obviously an extreme situation, but insurance companies often will include this exclusion.

Conclusion

One of the main purposes of insurance companies’ putting exclusions in their policies is to confuse and intimidate its policyholders. This works in their favor, because claims might be given up on due to frustration and discouragement. The Monfiston Firm, P.A. is committed to helping homeowners understand their insurance policies so they can get the payout they are entitled to. Want to see what we can do for you? Contact us so we can get started on your free consultation.

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