We hope you never experience any disaster in your home that requires submitting an insurance claim to our office.
What worries us even more, though, is submitting an insurance claim assuming there is coverage only to find out the claim is excluded from your policy.
With that in mind, we have put together a list of the top 7 most-frequently-excluded claims on homeowners insurance policies. While we are constantly working to provide you with the insurance coverage you need, subtle changes we are unaware of (like a trampoline purchase, for instance) may dramatically affect the range your insurance company is willing to offer.
We hope that by sharing this list, we can help uncover some potential gaps in your policy and provide you with some insight on how to cover them adequately.
If you have any questions specific to your policy, please don’t hesitate to contact our office.
Mold and Water Dam
At the turn of the century, a spike in mold-related claims led most insurers to remove the coverage from their homeowner’s policies.
Since 2000, there has been a dramatic increase in mold-related claims submitted to insurance companies. The peak came around 2002 when Ed McMahon filed a $20 million lawsuit against his insurance company for mold-related damages. After that, many insurance companies stopped providing coverage entirely or limited their coverage to a minimal amount.
Sewer Backup
The only thing worse than having a bathroom or basement overflowing with sewage is that you may have to pay the entire bill yourself.
Sewage backups are a standard exclusion on many homeowners insurance policies. Without purchasing the additional rider (which is usually less than $100), there is a perfect chance you will have to pay for the cleanup yourself.
We will often see homeowners try to get their cities to pay for the damages, but without being able to prove negligence, it is a tough thing to do.
Natural Disasters
Depending on where you live, your insurance policy may exclude coverage for certain natural disasters, including wildfires, earthquakes, and floods.
If you live in an area likely to be involved in a natural disaster, your insurance company may be reluctant to cover the incident. For example, almost every homeowner’s insurance policy excludes any coverage for earthquakes, floods, or landslides, and that coverage must be purchased through a specialty insurance company.
Also, if your home is located in a very remote area far away from any fire station or you live in a coastal area, then your insurance policy may not provide damage from fire or wind.
Neglect
Home damage that happens over a long period, like a slow water leak or a termite infestation, may leave you with the bill.
Homeowner’s insurance policies cover “sudden and unexpected losses” that happen to your home. Insurance companies expect you to care for your home and deal with maintenance issues. This means problems like slow water leaks or infestations are usually excluded from your insurance policy because they develop over a long period, and the homeowner should have detected them.
Bruce Johnson, author of “50 Simple Ways to Save Your House,” recommends conducting regular home inspections to detect potential problems. Tour the exterior of your home to look for cracks, decay, or water damage. Check the roof’s condition and inspect the basement or crawl space for hidden problems, including rodent droppings, termites, or leaks.
Trampolines
Some hazards, like a swimming pool or swing set, may cause an increase in your premiums, while other dangers, like trampolines, maybe outright excluded from your policy.
According to the National Electronic Injury Surveillance System, approximately 98,000 trampoline-related injuries every year, with fractures and dislocations accounting for 48% of those injuries.
With that in mind, many insurance companies are now excluding any injury related to trampolines. Some insurance companies will cancel your insurance policy if they find out you have purchased one.
So if you have purchased a trampoline, be sure to speak with our office to find out how it will affect your liability coverage and insurance policy.
Dogs
Dog bites now account for over one-third of all homeowners insurance claims, with average damages over $10,000.
With total damages exceeding $310 million a year, it is easy to see why insurance companies are very cautious about insurance residences with dogs. Whether or not your insurance company will surcharge for owning a dog or provide coverage depends upon the breed of dog you own.
Troublesome breeds like pit bulls, German shepherds, Rottweilers, and huskies may make finding an insurance policy that will provide liability coverage very difficult. Providing proof of dog training and a proper fenced-in enclosure with help prove to insurance companies you are taking the necessary steps to protect yourself and others. They may be willing to discount your premiums for doing so.
Intentional Damage
If your rebellious teenager or estranged spouse intentionally damages your home, there is a good chance you will be paying for the damages yourself.
Intentional damages caused by an insured person – you, your spouse, dependents, or any relatives living in the home – aren’t typically covered by your homeowner’s insurance policy. Estranged spouses are a very gray area for insurance companies. While they may not live at the residence, they may still be listed on the deed or have an insurable interest in the home, which will give insurance companies a right to deny any claim from their destruction.
* Disclaimer
The above information is to be used as guidance only and should not be considered definite in any particular case. Every policy is different, and you need to read through your policy and consult with your agent to determine how your coverage will respond. We cannot analyze every possible loss exposure within this article except the general guidelines above.