Why policies have exclusions
Homeowners insurance is designed for sudden, accidental losses like fire, wind and theft. Risks that are gradual, preventable or concentrated in certain areas are usually left out, or sold separately. Knowing the gaps lets you decide which ones matter for your home.
Some exclusions protect the policy from losses that are nearly certain to happen, like an old roof wearing out. Others cover risks so large in some regions, like floods and earthquakes, that they need their own pricing. Either way, the result is the same for you: the standard policy won't pay unless you add the coverage.
Common exclusions
- Flooding from rising water or storm surge
- Earthquakes and other earth movement, including most sinkholes
- Wear and tear, age and lack of maintenance
- Termites, insects and rodents
- Slow leaks and long-term seepage
- Mold, beyond limited coverage tied to a covered loss
- Sewer or drain backup, unless added
Separate policies to consider
Flood insurance is its own policy, and it can be worth having even outside a high-risk flood zone. Many flood policies have a waiting period before they take effect, so don't wait for a storm forecast.
Earthquake coverage is usually an endorsement or separate policy. Whether it makes sense depends on where you live.
Add-ons that fill common gaps
- Water backup and sump pump overflow coverage
- Service line coverage for buried water, sewer and utility lines
- Equipment breakdown for home systems and appliances
- Ordinance or law coverage for code upgrades after a covered loss
- Scheduled personal property for jewelry, art and collectibles
- Home business coverage for equipment and liability
Real-world gaps
A slow pipe leak behind a wall, a termite-damaged sill plate and a basement flooded by river water are all commonly denied under standard policies. So is a sewer backup in a policy without water backup coverage.
In each case, the fix is the same: know your exclusions before a loss, not after.
How to read your policy
Start with the declarations page for your limits and deductibles. Then read the exclusions section and any endorsements listed. Exclusions vary by carrier and state, and endorsements can change them.
If something is unclear, ask your agent to explain it in writing. Review your coverage when your life changes too, such as after a renovation, a new home business or a big purchase like an engagement ring.
