The exclusions page, and why flood is not covered

A homeowners policy is defined as much by its exclusions as by its coverages, and the exclusions section is the part nobody reads.

Flood

Excluded from essentially every standard homeowners policy in the United States.

The definition of flood is broad: surface water, overflow of inland or tidal waters, mudflow, and water that rises from the ground.

Water damage from a burst pipe is generally covered. Water damage from a river rising, from storm surge, or from surface water accumulating is not.

The distinction is about where the water came from, not what it did.

Coverage is obtained separately, through the National Flood Insurance Program or through private flood insurers, which have expanded considerably.

Key points about flood coverage.

There is generally a waiting period after purchase before coverage takes effect, commonly thirty days, which means buying when a storm is forecast does not work.

Program coverage limits for building and contents are capped, and higher limits require excess flood coverage from private markets.

Basement coverage is limited, and contents in basements are covered narrowly.

Coverage is available outside high-risk zones and is much cheaper there. A meaningful share of flood claims occur outside designated high-risk areas.

Flood maps are updated and can be inaccurate. Being outside a mapped zone does not mean the property cannot flood.

Earthquake

Also excluded from standard policies, and available by endorsement or separate policy.

Earthquake coverage typically carries a percentage deductible — commonly ten to twenty percent of the dwelling limit — rather than a flat dollar amount, which on a $500,000 home means a deductible of $50,000 or more.

This makes it useful for catastrophic loss rather than moderate damage, which is worth understanding before assuming it is not worth buying.

Earth movement generally

Beyond earthquake: landslide, sinkhole, subsidence, and settling.

Sinkhole coverage is mandated or regulated in some states with known geology, and excluded elsewhere.

Foundation problems from soil movement are a common and generally excluded loss, which surprises homeowners facing very expensive repairs.

Maintenance and wear

The category producing the most claim disputes.

Policies cover sudden and accidental damage, not deterioration. Excluded are: wear and tear, deterioration, rust, corrosion, rot, mold in many circumstances, settling, and damage from failure to maintain.

The practical effect: a roof that leaks because it is old is not covered. A roof that leaks because a tree fell on it is.

Adjusters look for evidence of long-term deterioration, and a claim for water damage from a slow leak that developed over months is frequently denied on this basis.

Mold

Generally limited or excluded, with many policies providing a small sublimit and excluding mold arising from excluded causes.

Mold resulting from a covered water loss may be covered up to the sublimit; mold from humidity, condensation or a long-term leak generally is not.

Given remediation costs, the sublimit is frequently inadequate.

Sewer and drain backup

Excluded from standard policies and available by endorsement, usually inexpensively.

This is a common loss, particularly in older neighborhoods and in areas with combined sewer systems, and the endorsement is worth adding.

Ordinance or law

An important and technical one.

If a covered loss damages part of a house, and building codes require the repair to bring the whole structure up to current code, the additional cost of code compliance is generally excluded unless ordinance or law coverage is added.

On older homes this can be very substantial — electrical, plumbing, insulation and structural requirements that did not exist when the house was built.

Add the endorsement, particularly on older properties.

Other common exclusions

Intentional acts. War. Nuclear hazard. Government action. Neglect. Vermin, insects and rodents. Animals owned by the insured. Business activity conducted at the residence. Vacancy beyond a specified period, which matters for properties left empty during renovation or after a death.

That vacancy exclusion catches people. Most policies restrict or void coverage for certain perils once a dwelling has been vacant beyond thirty or sixty days.

What to do about it

Read the exclusions section of your actual policy. It is a few pages and it is the most informative part of the document.

Then consider endorsements for the gaps that matter in your situation: flood, earthquake where relevant, sewer backup, ordinance or law, and increased mold limits.

Ask your agent directly: what are the three most likely ways this house could be damaged that my policy would not cover?

A good agent will answer specifically.

General information about insurance concepts, not insurance or legal advice. Policy language and available endorsements vary by insurer and state. Read your own policy and consult a licensed agent.