Homeowners Insurance Policy Exclusions

Q: What are typical exclusions that you find in homeowner policies?

An “exclusion” is a type of loss that a homeowner may suffer that is specifically not covered by the insurance policy. That type of claim is “excluded” from coverage.

Water Damage Exclusion

One of the primary exclusions is water damage, including flood damage. Homeowners insurance also doesn’t slow leakage or seepage over a long period.

Let’s say a pipe in your house suddenly breaks. This is a loss is covered because it was a sudden event. The insurance company may argue that the water break really happened over a long period of time and wasn’t a sudden loss, so that they can deny the claim under the low or slow seepage exclusion.

Frozen Pipes Exclusion

Another common exclusion is frozen pipes. There is an exclusion that says that the insurance company won’t cover freezing pipes or loss as a result from frozen pipes, unless the insured did something proactive such as used provisional care to maintain the heat in the building or shut off the water.

Mold or Fungi Exclusion

There is also a mold or fungi exclusion. The insurance company will limit how much it is required to pay for mold damage.

Earth Movement Exclusion

Lastly, there is an “earth movement” exclusion. The actual language of the earth movement exclusion is oftentimes ambiguous, so there are a number of cases in Nevada dealing with how the earth movement exclusion is actually narrower than insurance companies would like to claim it is.

Q: Is a sinkhole considered earth movement?

In a typical homeowner’s insurance policy, earth movement is defined to include a sinkhole, but in some policies, they don’t define earth movement exclusions to include human-caused earth movement. For example, if someone is working on the house next door, and that causes the foundation of your house to collapse, the insurance company may deny the claim arguing that it falls within the earth movement exclusion. Whether the insurance company must pay on a claim like this depends on whether the policy excludes human-caused earth movement or not.

It’s very important to consult an attorney who is knowledgeable of homeowner’s policies and in Nevada case law to see whether the insurance company is correct in its interpretation of the exclusion language of the policy.

In this particular example, we, as your attorneys, may also pursue the insurance company of the builder that undermined your house, as well as the neighboring property owner who hired the builder.

Buying Extra Insurance Coverage for Excluded Events

You can buy separate earth movement/earthquake insurance for an additional premium if you are concerned about it, and you can buy flood insurance for water damage. Additional coverage of this type is not always cheap so the question about whether you have the insurance depends on whether the peace of mind of knowing you’re covered is worth the additional premium that is required for the additional coverage.

Exclusions in Landlord Insurance Policies

Sometimes you will see exclusions for typical wear and tear, or moderate deterioration in landlord insurance policies.

There are also situations where a landlord is reclaiming a unit after the previous long-term tenant vacates. The landlord inspects the house, sees that it is in a terrible state of disrepair, and submits a claim to the insurance company saying, “this damage created by the tenant is vandalism, not normal wear and tear.”

In this scenario, the insurance company often will argue that it was a long-term tenant and therefore all of the damage to the property falls under the “normal wear and tear” exclusion, regardless of how extraordinary the damage may be.

It’s very important to consult an attorney who is knowledgeable of homeowner’s policies and in Nevada case law to see whether the insurance company is correct in its interpretation of the exclusion language of the policy.

Q:Does the insurance company ever change its position on a denied claim?

With the claimant acting on his or her own behalf, the insurance company normally would not reverse itself on a decision to reject a claim.

Sometimes a claimant needs to speak with, and hire, an experienced Nevada insurance lawyer to collect on a legitimate claim. Even if it has to go to trial, occasionally insurance companies must be forced to pay on a valid claim.

Attorney Patrick Leverty

Attorney Patrick LevertyWith his master’s in insurance law, Patrick routinely helps individuals and businesses who are having issues with their insurance company. He also has extensive experience with personal injury actions, complex tort actions, product liability matters, and class actions. Patrick Leverty is rated AV by Martindale Hubbell (the highest rating) and has been granted membership in the Million Dollar Advocate Forum, and Multi-Million Dollar Advocate Forum. Patrick Leverty has been certified as a Personal Injury Specialist by the State Bar of Nevada. [ Attorney Bio ]