Being excluded is always unsettling, but it’s even worse when it pertains to a situation that you expected to be covered under your insurance policy. Panic can begin to set in when you’re standing in the wreckage of a burst pipe or fallen tree. It sets even further when you’re informed that the cleanup process must be bankrolled by your own pockets with no promise of reimbursement. The problem is that while homeowners insurance does cover a wide array of incidents, there are loopholes in your policy that may play in favor of your insurer.
Exclusions essentially exist to prevent insurance fraud or the over-inundation of claims. Uninsured incidents can range from catastrophes (ex. war) to negligence (ex. a pipe burst stemming from the homeowner’s failure to heat the home properly) to outright illegality (ex. arson committed by the homeowner). Other instances may be more surprising, like the non-coverage of general wear and tear. Regardless of what your exclusion may address, it is important to not lose hope of coverage until your whole policy has been examined by an attorney.
If your claim has been denied on the grounds of an exclusion or you fear that it might be, be sure to have your whole policy available to submit to your lawyer. Most importantly, make sure this is the policy that pertains to the incident in question. The policy period can be found at the top of your declarations page. While the general focus of your policy tends to remain the same throughout the years, fine print (such as that found in exclusionary clauses) could possibly change as insurers reflect on issues with their existing claims over the past year. These intricacies are precisely what your attorney is looking for when it comes to determining whether or not your claim is, indeed, valid.
Exclusions can only be understood in relation to your policy as a whole. For example, one very general exclusion in standard homeowners insurance policies is flooding. This exclusion is why there is a separate, federally-backed flood insurance program. As per our discussion of burst pipes, fixing the pipe itself is oftentimes subject to exclusions—usually on the grounds of negligence, but also overall maintenance. If old pipes go up due to natural aging, it might seem like you are out of luck, both in terms of the repair of the pipe and the water damage in which you are now standing. However, if an exception from your maintenance exclusion includes subsidiary damage that is otherwise covered, there may be hope. Flooding that’s caused by a non-natural disaster can be exempt from the flooding exclusion. So, while the repair of your pipe still might not be covered, the water damage very well could.
Believe it or not, this example is one very general illustration of how important it is to read an entire policy in relation to all of its moving parts. Understanding how multiple exclusions relate to one another can be like putting together a complex puzzle. Lawyers’ training in logic can help create the full picture to present to your insurer. While it’s easy to panic when you see the word exclusion, don’t get too overworked until you have a lawyer look over your whole homeowners policy.