As noted in the previous blog post, a homeowner’s policy covers a variety of risks, losses, or claims. In this post, we will more closely examine the specific risks, losses, or claims that are generally covered and those that are generally excluded from coverage by answering a few common questions we receive from homeowners.

What if my house is damaged or destroyed by a fire, lightning, or a flood?

Fire damage to a house (or its destruction) is generally covered by the homeowner’s policy. In fact, early versions of what is now known as a homeowner’s (or home) policy were called fire policies. The fire could be caused by lightning or even a homeowner’s negligence and still be covered. In other words, if you accidentally catch your house on fire, the loss or damage is usually covered!

Additionally, a lightning strike which causes damage to a home, but not necessarily a fire, would also be covered.   

Damage to a house caused by a flood (in essence, rising water) is generally not covered. Flood damage is typically excluded from homeowner’s coverage because this type of loss would be handled by another type of coverage: flood insurance.

What is an exclusion?  

An exclusion in an insurance policy is a specific risk, loss, or claim that is expressly not covered by the policy. Most insurance policy exclusions are based upon one of two reasons. Either the loss or claim is covered by another type of policy (such as an automobile policy or a flood policy) or the loss or claim cannot be insured against as a matter of law or public policy (for example, an intentional act which causes damage—in other words, you cannot insure yourself for causing an assault or homicide).  Additionally, insurance coverage can be limited or excluded in an effort to curtail coverages for the purpose of reducing premium costs (such as a limitation or exclusion of damages responsive to a punitive or exemplary damage finding by a judge or jury) or risks insurers are simply unwilling to insure against (such as mold or asbestos exposure).

What if my house is damaged by water that is not the result of a flood?

In this case, the coverage would depend on how the water damaged the house. As we saw above, damage from a flood is usually not covered by a homeowner’s policy. However, damage caused by a “sudden and accidental” leak is generally covered. Examples of this type of a loss would be damage to the insured house or structure from burst pipes, a failed water heater, or a roof leak after a “windstorm”. Conversely, damages caused by a continuous leak are generally not covered. Further, mold damage is generally excluded from coverage.

What if my house is damaged by termites?

Damage caused by insects (including termites) is generally excluded from coverage under a homeowner’s policy. Additionally, damages to an insured structure or dwelling from rats, mice, squirrels, and possums are also excluded.

What if someone breaks into my house and steals my belongings?

Theft losses are generally covered. However, some homeowner’s policies may have a condition that the insured house cannot be unoccupied for over a certain number of days and maintain coverage. So, if you relocated to the mountains of Colorado from June until September in an effort to escape the Texas heat, and your homeowner’s policy excluded coverage for a dwelling unoccupied for more than 60 days, then a loss from a burglary in that period of time might not be covered. Additionally, any other losses that may have occurred during that same period of time from events such as a fire or a windstorm may also not be covered.

The Way Forward

You should always check to see if a potential loss is covered (or excluded) by reading the policy in advance of obtaining the coverage. Ask questions of the agent or broker as well. The best way to have peace of mind concerning your insurance policy is to ask an experienced lawyer to review your policy with you and provide you with an assessment of whether the potential losses you want to insure are great enough. 

About the author

Terrance Dill has been practicing law since 1992 and is often asked to determine if a particular claim or occurrence is covered by a particular policy of insurance. Terrance also handles a variety of other legal disputes for his clients and resolves disputes as an arbitrator and mediator.