Home insurance is a necessary financial product that not only covers the structure of your house but the contents as well. Most policies provide coverage for calamities such as fire, theft, and third party damage. In addition, some policies do offer liability protection as well as protection against legal action relating to bodily injury. Contrary to perception, home insurance does not provide coverage for every mishap that could befall an insured household.
Below are the top exclusions in most home insurance to help you better understand your home insurance policy.
Destructive Events i.e. Floods & Earth Quakes
Property damage due to floods are one of the biggest exclusions in home insurance policies. Insurance providers shy away from insuring against natural disasters that result in substantial damage. Should your home suffer loss as a result of a flood, then a standard home insurance policy would likely not cover such damages.
In addition to floods, an insurer may refuse to pay out in case of damage from earthquakes, acts of war, or acts of governments such as seizures. Your insurer is likely to review things on a case by case basis.
For instance, an insurance provider may refuse to provide home insurance cover against wind damage in a coastal area. It is thus important to sit down with your insurance provider to get a better grasp of your home insurance policy.
Damage Caused by a Lack of Maintenance
Home insurance seeks to provide cover against events that are beyond the control of homeowners. For this sole reason, insurance providers will not provide cover in the case of damages caused by a lack of maintenance or negligence.
For example, if you fail to trim a tree in the household and it falls on an insured property inflicting significant damage, the insurance company may refuse to provide coverage. The insurance company may also refuse to pay in the case of unaddressed wear and tear which can result in a water pipe bursting and inflicting significant damage.
In addition, an insurance company may bulk out of paying in the case of damages that come into being while an insured house is undergoing renovation or maintenance. For that reason, it is important to hire a licensed contractor that will assume liability.
Normal home insurance exclusions due to negligence include, sewer back up, normal wear and tear, and water damage or mould. Some home insurance plans limit coverage or completely exclude mould damage. However, some insurance providers may offer protection if you opt for a higher premium.
Home insurance policies also do not offer protection against damages caused by the earth’s movements in the case of sinkholes.
Theft of Pricey Items
Home insurance policies do provide coverage for personal belongings in a household. However, there is always a caveat or a cap to the extent that the insurance provider will provide coverage. While such policies provide coverage for jewellery, an insurance company may refuse to pay for a particularly pricey item.
Such caps do not apply only to expensive jewellery, but as well as expensive collectibles and fine art. However, in some instance, an insurance provider may urge you to buy an additional rider for coverage of specific pricey items in your household.
Some home insurance policies do not offer coverage for injuries or damages caused by dogs especially those belonging to aggressive breeds. However, for some breeds an insurer may cover expenses incurred up to limits on the liability coverage.