Exclusion

Exclusions are a way for insurance companies to more narrowly define what’s covered and what’s not in your standard home or renters insurance policy.

While most exclusions can be found after the main coverage sections in your policy (named perils, personal property, personal liability, additional coverage, and medical payments to others), you’ll also notice exclusions in the definitions, conditions, and endorsements sections.

More on that to come.

Named perils (aka, bad things that may happen to your stuff) are where most of the exclusions in your standard insurance policy will pop up.

There are 9 main exclusions to named perils:

1. Ordinance or Law
2. Earth Movement
3. Water (think Flooding)
4. Power Failure
5. Neglect
6. War
7. Nuclear Hazard
8. Intentional Loss
9. Governmental Action

So you’re probably thinking “great, but what the heck do these things mean?” We’ve got ya covered.

Ordinance or Law:

Means losses from legal stuff relating to construction, repair, or any tearing down or debris removal.

Earth Movement:

Refers to damages/losses from things like landslides, mudslides, sinkholes, earthquakes (there’s a separate policy for this if you want), and any other earth movement including earth sinking, rising or shifting.

Water:

We’re talking flooding from the outside-in: natural stuff like groundwater, tidal water, tsunamis, etc. as well as flooding caused by sewer blockages or broken sump pumps.

Caveat? For the natural stuff, you have flood insurance. Look into it when you’re getting a policy.

Power Failure:

This one’s pretty specific… if a power failure causes loss to stuff that isn’t on your property (even if it was a result of a named peril), it’s not covered.

Neglect and Intentional Loss:

Like most things that aren’t covered in your insurance policy, neglect and intentional loss fall under the category of stuff you can prevent. Once a loss happens, if you don’t do everything in your power to make things right, then it’ll be considered neglect – if you did it on purpose, it’s intentional loss.

War and Nuclear Hazard:

Quite simply, losses from war and nuclear hazard are excluded from your coverage.

Governmental Action:

This exclusion deals with good ‘ole Uncle Sam… if for some reason the government decides to do something that causes a loss, it’ll be excluded from your insurance coverage, unless the governmental action happened because of a named peril.

Note: in terms of personal liability, most of the exclusions have to do with vehicles and other things with engines if you’re the one in control/driving.

The three other places in your insurance policy where you’ll find exclusions are the endorsements, definitions, and conditions sections.

A very common endorsement exclusion has to do with dogs and liability, and more specifically, excluding dangerous breeds or canines with a history of biting. Exclusions on definitions and conditions basically help narrow the scope of what your insurance company is trying to set forth in your policy.

Moral of the story is, read your insurance policy… and then read it again!