Insurance is a risk-based product and insurance companies profit most when there is less risk. As a result, the world of home insurance is often riddled with exclusions and limitations hidden in the fine print, just waiting to thwart homeowners who attempt to file a claim. Fortunately, if you’re prepared, you’ll know what to look for and how to ensure you have the coverage that you need.

Florida insurance policies have to follow strict rules regarding hurricane coverage and water damage. However, there is also plenty of room for insurance commpanies to find (or create) loopholes that allow them to reduce their risk by excluding the most costly (and often most common) types of coverage. 

Exclusion #1 – Floods and Water Damage 

This is one of the biggest categories of exclusions that has insurance adjusters and underwriters at the ready as soon as a storm settles. While unsuspecting homeowners will file claims for all types of storm damage, including flooding and water damage, most don’t realize they aren’t covered until their claim is denied. 

There are several types of home insurance policies and coverage options. However, almost all policies that claim to be “all-perils” coverage will deny any water damage that is caused by or related to:

• Earth movement 
• Flooding caused by nature or weather 
• Mudflow
• Overflow of lakes, oceans, etc. 
• Sewer or drain backup
• Sump pump discharge

The last two can be covered by a policy endorsement added to your home insurance. The rest, however, probably won’t be covered. You may be able to purchase flood insurance from the National Flood Insurance Program, but that will also have its own limitations and exclusions to watch for. 

For example, any water damage that is caused by water that comes through basement walls, window wells, or even the main level of the home will not be covered unless you have specific flood insurance or other specialty coverage. 

Wind-driven rain that is able to penetrate the siding or roof of your home and cause water damage, on the other hand, should be covered as long as it isn’t specifically excluded in your policy (which is rare). 

This is one of the most complex and difficult areas of home insurance to navigate. If you want to make sure that you’re protected or that you get the compensation you deserve for your water damage claim, consider hiring a public insurance claims adjuster to review your case. 

Exclusion #2 – Mold 

Mold is one of the most popular topics that insurance companies like to dance around, providing vague information on coverage and exclusions that make it difficult for anyone to understand what is and isn’t covered. Every policy is different, but you’d be safest to assume that mold damage is not covered unless it is the direct result of another covered claim or issue, such as water damage from a burst pipe or an appliance failure. 

You can purchase additional mold coverage in the form of an optional rider. In Florida, however, these riders can be quite expensive. The best thing to do is to have someone on your side, such as a public insurance adjuster, who can advise you on your current coverage, as well as how to get the best settlement from any mold claims that you file now and in the future. 

Exclusion #3 – Pests and Related Damage 

Termites, mice, cockroaches, and other vermin and pests will almost always be excluded from home insurance coverage. This is because in the eyes of the insurance company, keeping pests away and eradicating infestations is a “routine” part of owning and maintaining a home. There are certain exceptions, but insurance companies will always be looking out for their own best interests first. 

If mice chew through wires and that leads to a fire in the home, the damage will typically be covered. However, if you just have mice and they’ve chewed up your walls and ruined your cupboards with urine and feces, that’s generally going to be considered “your problem” by the insurance company. 

In the same regard, if termite damage causes part of your home’s structure to fail, the insurance company may pay for some of the damage repairs. If they discover that the damage has been present (and visible) for a long period of time, however, they will quickly deny coverage because it should have been addressed sooner. 

Exclusion #4 – Ground Movement 

Sinkholes, landslides, earthquakes, and other ground movement activities are typically excluded from home insurance coverage. In Florida, there is a requirement that insurers offer optional sinkhole coverage on home insurance policies. Beyond that, homeowners will be required to find another way to get this coverage. 

It may benefit you to talk to a public insurance adjuster about “difference in conditions” coverage and other types of insurance that can offer the protection that you need. 

Exclusion #5 – Existing Damage or Wear and Tear 

Insurance adjusters love picking apart claims and trying to find as many instances of pre-existing damage or conditions that could have prevented the claims people file. One of the biggest reasons claims get denied is because insurance companies can trace them back to issues that should have been resolved or addressed sooner. 

For example, roof maintenance that leads to damage might cause a denied claim. A roof that is damaged by a storm, however, will be covered. Pipes that burst may be covered, unless it’s discovered that pre-existing damage and wear caused the burst in the first place. 

Exclusion #6 – Wind Damage 

Most states have wind damage included in their standard home insurance policy. In Florida and other Gulf states, however, policyholders may also need to have hurricane coverage or a “named storm” deductible to cover any wind damage that’s related to a hurricane or tropical storm. These deductibles don’t have flat-rate dollar amounts like other coverage. Instead, they’re calculated by taking a percent of your home’s value (usually one to five percent). 

This is where home insurance can get expensive for Florida homeowners. If you have a home insured for $400,000 and your named storm deductible is two percent, you would have to pay $8,000 before insurance would cover the rest. 

At five percent, your responsibility would jump to $20,000. 

If you have the option to choose your percentage, stick with the lowest one possible. And most importantly, make sure that you have a clear understanding of what wind damage is and isn’t covered by your home insurance. In a state like Florida, it’s essential knowledge to have. 

Exclusion #7 – Aggressive or Dangerous Dogs 

This isn’t the hot topic it once was, but insurance companies are still spending millions of dollars on dog bite claims. As a result, more insurers are limiting the breeds they cover, requiring detailed information on dog history before insuring them, and more. Most notably, pitbulls and rottweilers get a lot of attention for being seen as “dangerous” dogs. Others that top the list include:

• German Shepherd
• Husky
• Dobermann
• Chow Chow
• Mastiff Breeds 
• Wolf Breeds
• Cane Corso
• Bull Terriers 

Some insurance companies just won’t cover your dog, but will insure the rest of your home and its contents. Other companies will flat-out refuse coverage to some people based on the dog they own. If you’ve got one of the breeds listed above, make sure that you’ve got proof that he or she is a good dog (such as certified training, etc.) to help plead your case. 

Exclusion #8 – Utility Company Power Surges 

If there is a power surge or outage that originates offsite, including those caused by the utility company, any resulting damage will not be covered by an insurance policy. If there is a power surge or failure that causes damage on your property, that should be covered. If you have damage related to a utility company issue, you’ll have to reach out to them to find out how to get compensation or other assistance. 

Exclusion #9 – War or Government Action 

If there’s a war or the government raids your home for some reason, it’s not likely that home insurance will be the first thing on your mind. However, it’s important to know that major events like these typically aren’t covered on most home insurance policies. This could include:

• Confiscation of belongings
• Confiscation of land and physical property
• Condemnation of your home
• Related damage 
• Acts of war, terrorism, etc. 

There may be a rare exclusion here or there, but this is one area where insurance companies are very clear: this type of coverage is above their pay grade. 

Exclusion #10 – Home-Based Business Liability 

The COVID-19 pandemic created an entire globe of work-from-home warriors. People across the country and around the world have renovated their homes, upgraded their home offices, and gotten right to work, all without missing a beat. However, what many people haven’t considered is whether their home insurance will cover the “business” activities that are happening in the house and any incidents or losses that result. 

Business property coverage is limited on a home policy, while home daycares, pet boarding, and other businesses are excluded from coverage entirely. Shrubs, plants, and trees that are grown for business use are also excluded. This is what home-based business insurance is designed to protect. Talk to a public insurance adjuster about separating your home and business coverage properly. 

The Bottom Line 

As you can see, insurance companies will do their best to find plenty of ways they won’t have to pay. Fortunately, by being educated and prepared, you can get a better outcome in your situation, no matter what you are facing. For additional support, contact the team at On Target Claims. Our expert claim adjusters can provide you with a review of your claim and help you get the settlement that you deserve. Call us now at 954-266-0541.

Related Content: Waiting for Home Insurance Claims in FL? Here’s What You Need to Know