Excluded Claims

In determining if a claim is covered under a homeowner’s policy, the insured should look to the language contained in the policy itself. Knowing exactly what the homeowner’s policy covers and what it specifically excludes also allows the homeowner to determine if he or she needs to purchase special or additional coverage for excluded events.

Exclusions

Exclusions vary by policy type. For example, an HO-1 policy covers 11 different perils. The perils are theft; fire or lightning; explosion; wind or hailstorm; civil commotion or catastrophe (riots); aircraft accidents; other vehicles colliding into your home; smoke damage; acts of malicious mischief (vandalism); damage by glass or safety grazing material of the structure; and volcanoes. Any damage that occurs from a peril not included in the list of the HO-1’s eleven perils, is “excluded” from coverage under the terms of the policy.

Likewise an HO-2 policy covers those perils, and six more. Any damage that occurs from a peril not included in the list of the HO-2’s eleven perils, is also an excluded event.

The HO-3 policy, known as the "broad-risk form", and the HO-5 policy covers any perilous situation, except those specifically named as “exclusions” in the policy. The standard HO-3 policy contains a number of exclusions.

The following paragraphs contain situations in which some events are covered and some events not covered under the standard HO-1 through 5 policies. Some of these examples are included to demonstrate ordinary coverage issues while others have been included to demonstrate bizarre coverage questions.

Excluded Events:

Flood Water damage :

The standard HO-1 through 5 policies do not cover damages resulting from flood waters. Home owners living near oceans, rivers and lakes should contact their agent to purchase and additional endorsement or policy for flood insurance. Even water damage coming from sewer backup is typically excluded under the standard HO-1-5 policy, but additional coverage for such an event can be purchased separately.

Damages from Acts Resulting in Home devaluation :

Damages to the value of your home resulting from nearby undesirable property usage, such as a prison or sewerage treatment plant will not be covered by the standard HO-1 through 5 insurance policies. Your home is insured for rebuilding and/or replacement cost only. Home devaluation has no direct relation to insurance and is therefore excluded from coverage.

Damages from Dumping Pollutants:

When a company indirectly dumps pollutants on to your property via a stream or through the air, the resulting damage will generally not be covered by the standard HO-1 through 5 policies. When an event like this occurs, the homeowner must usually sue the company for damages and/or an affirmative injunction ordering the company to cleanup of the homeowner’s property. These lawsuits can be time consuming and expensive.

The above event is not to be confused with the negligent spilling of home heating oil on the homeowner’s property which may very well be covered under his or her homeowners policy.

Damage Caused by Candle Soot or Other Residue:

While burning candles in the home can be romantic and charming, damage resulting from candle soot is not covered by the standard HO-1 through 5 policies. The loss created by candle soot or residue that spreads throughout a home from candle burning is not a “sudden or accidental loss” and is therefore not covered by the standard homeowner’s policies. The rationale for denying coverage is based on the fact that candle soot accumulates over a period of time and is not sudden and the loss is also not accidental since the homeowner is the one burning the candles that produce the soot.

Homes that burn heating oil also produce residue that destroys wallpaper, drapes, and clothing. Just as in the case of candle soot, this type of damage is excluded from coverage under the standard HO-1 through 5 policies.

Damages caused by Termite, Cockroach, Mouse, or Rat infestation:

Damages resulting from infestations such as insects or rodents falls under the general exclusion of "wear and tear" and is generally not covered by the standard HO-1 through 5 policies. Once again the rationale for exclusion of this type of damage focuses on the fact that pest problems are not "sudden and accidental," but are continuous problems that the homeowner could have prevented with proper maintenance.

Damage Resulting When a Home Based Business is Destroyed:

Let’s say you make your livelihood at home using your home office equipment and a fire destroys your home. While your losses for the home will generally be covered by the standard HO-1 through 5 policies, losses that can be linked to your business, such as your computer or printer or even file cabinets will not be covered. Entrepreneurs that run their business out of their home need to contact their insurance agent and buy a special coverage available for home-based business.

Damage Resulting from Nuclear Power Plant Leakage:

If a nuclear power plant leaks and causes your home or possessions to be unusable due to radiation poisoning, the event will not be covered under the standard HO-1 through 5 policies. Nuclear accidents are recognized as a standard homeowner insurance exclusion throughout the nation. In fact, the event is so scary, that no insurance company appears to offer a homeowner insurance rider to protect homeowners in case of nuclear meltdowns. The homeowner’s only remedy would be to sue the power company and or state agencies involved for damages.

Damage Resulting from Home Slides Down a Cliff:

A person who builds their home on a cliff is generally deemed to know the risks involved. The standard HO-1 through 5 homeowners policies won't cover damages resulting from a home sliding down a cliff. This exclusion applies even to earthquake policies. If your house slides down the cliff because of a natural or rain-induced landslide, or any other reason not earthquake induced, the damage will not be covered. In some states, such as California, or other states that frequently have wildfires, (which make the cliff or hill susceptible to landslides), the homeowner should inquire with his or her agent about purchasing “landslide” coverage from surplus lines insurer.

Damage resulting from Sinkholes:

Damage caused to you property or structures on your property caused by sinkholes will be excluded from coverage under the terms of most standard HO-1 through 5 policies. Despite the fact that your homeowners policy won't cover this type of event, the problem is so prevalent in the coal belt states, such as Illinois , Ohio , Pennsylvania , and West Virginia , that these states have put in place a special insurance administered under the states’ Mine Subsidence Authority. The cost of this insurance varies from state to state so check with your state's department of insurance or your agent to find out the specific cost and coverage available.