Thursday, November 10, 2011

Insuring Your Home To Value - Exclusion Damages To Your Home

Insuring Your Home To Value 

Earth Movement

The earth movement exclusion is not limited to the peril of earthquake, but also includes:

  • land shock waves, including tremors associated with volcanic eruptions;
  • landslides, mudslides, and mudflow;
  • subsidence or sinkholes; and,
  • any other earth movement, including earth rising, sinking, or shifting (for example, due to variation or changes in the amount of subsurface water that causes soil to expand or contract).  
This exclusion applies regardless of whether the earth movement is the product of natural, human, or animal forces, unless fire or explosion results from the earth movement. Fire and explosion are referred to as ensuing losses for which coverage expressly exists.

Water Damage

Although coverage for accidental discharges or overflows of water from plumbing, air conditioning, sprinkler systems, or household appliances applies, there are many types of water damage beyond those categories. The water damage exclusions list those types of water damage that are not covered. 

The flood category includes not only floods, but other similar (and often overlapping) concepts such as: surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or rust driven by wind. Policies will often contain repetitive listings of substantially similar concepts to avoid claims in which, for example, a homeowner may stare a flood did not cause the damage but rather an overflow of water. The repetitive list is designed to cover these claims that seek to rely on trivial semantic distinctions to assert coverage for excluded perils.

Flood damage falls into the category of losses that are too predictable for insurance in the normal markets. Where floods have occurred, they will reoccur - it is only a matter of time. Flood plains are well-documented by the United States Army Corps of Engineers, including with historical records that permit a reasonable estimate of the frequency of flood in a given area. Insuring Your Home To Value

For coastal areas subject to hurricane flooding, similar informatton is available. Because the peril of flood is universally excluded, the Federal Flood Insurance Program was established. If you are in a flood area, your agent or broker can help you obtain a separate flood insurance policy.

The second category of excluded water damage losses is water or waterborne material (i.e., sewage) that backs-up through sewers or drains or which overflows or is discharged from sump pumps or related equipment. This is a long-standing exclusion that nonetheless comes to the unfortunate surprise of many policyholders each year. While such persons often have recourse against a governmental body or sewer/water agency in the event of such losses, the claims process against a governmental entity can be protracted and difficult. There is, however, something you can do to help prevent such losses. Consult a plumber. If your toilets and drain lines are not equipped with antiback-flow devices, get such devices installed.

The third category of excluded water-damage losses is subsurface water that causes damage by exerting pressure on or seeping or leaking through a building, sidewalk, driveway, foundation, swimming pool, or other structure. Problems of this nature are commonly the product of poor siting or construction. The policy excludes coverage for this category of damage because it will recur unless the fundamental problem that created it is corrected.
Finally, as with the earth movement exclusion, loss by fire, explosion, or theft that results from water damage is covered as an ensuing loss.

Power Failure
Under the ISO HO 3 policy, no coverage exists for power failure that originates away from the residence premises, unless such power failure results in a loss from a separate covered peril.

Neglect is defined as the neglect of an insured to save and preserve property after the time of loss. When this exclusion applies, it should apply to preclude coverage for the amount of additional damage caused by the insured's neglect, unless the insured's neglect was the predominating or triggering cause of the loss in the first place. 


The war risk exclusion has been a fixture of insurance policies for generations. In light of recent events, questions have arisen whether loss due to acts of terrorism are subject to the war risk exclusion. The answer is: probably not. One of the subparagraphs of the war risk exclusion provides that war includes: undeclared war, civil war, insurrection, rebellion, or revolution. 

Undeclared war connotes military action by a foreign nation and probably does not reasonably embrace the concept of acts of terrorism. Acts of civil war, insurrection, rebellion or revolution conceivably could embrace acts of domestic terrorism, but only when committed by organized groups. Insuring Your Home To Value

Nuclear Hazard
This exclusion does no more than cross-reference another section that states that nuclear hazard is considered an uninsurable risk. The sole exception to this exclusion is direct loss by fire resulting from the nuclear hazard.
Intentional Loss
As a general concept, it should come as no surprise that a policy excludes loss arising out of any act an insured commits or conspires to commit with the intent to cause a loss. What may come as a surprise is that in the second paragraph of this exclusion, the policy provides that an intentional loss committed by any insured will result in the preclusion in coverage for all insureds. 

This precludes a so-called innocent co-insured from coverage when another insured commits an intentional loss. While the courts of the fifty states are split on this issue, the majority of jurisdictions hold that no coverage exists for innocent co-insureds for intentional acts of another insured.

Governmental Action

This exclusion precludes coverage for the destruction, confiscation, or seizure of a dwelling, other structures, or personal property by order of any governmental or public authority. There is a significant exception to this exclusion. When a governmental body acts at the time of a fire to prevent its spread, loss will be covered.

In practical terms, this exclusion prevents coverage when a government seizes property based on the arrest or conviction for certain crimes or offenses, such as drug related offenses.

Section 1: Concurrent Causation

The second group of exclusions applicable to the property coverages of homeowners policies consists of three categories that are of great importance. However, unlike the preceding nine exclusions, this group of three categories of exclusions is not made subject to the anticoncurrent causation language. Effectively, these exclusions are narrower than those we have just discussed.

There are a couple additional qualifications to note. First, these exclusions only apply to the dwelling and other structures coverages, not to the contents coverage. This further narrows the scope of these exclusions.
Second, if there is an ensuing loss to the dwelling or other structures by a covered peril for which coverage is not precluded by any other policy provision, that ensuing loss is covered.

We'll continue to talk about other insurance exclusion in the next post. Right now, you can get more info about  Insuring Your Home To Value to benefit yourself.

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