Homeowners Exclusions and Conditions

Standard Property Exclusions (Section I)

A standard homeowners policy provides broad protection, but it does not cover every type of loss. Standard ISO forms contain major exclusions that apply to property coverage under Section I. For example, standard homeowners policies exclude loss caused by flood, surface water, waves, and water backing up through sewers or drains. Earth movement, including earthquake, landslide, mudflow, and earth sinkhole, is also excluded. Insurers may use their own forms and endorsements to add coverage back, but the base contract excludes these perils.

Other common general exclusions address public hazards and intentional acts. War, insurrection, rebellion, and nuclear hazard are standard perils excluded from property coverage. Intentional loss committed by or at the direction of any insured is excluded. Furthermore, the neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss is excluded. If a power failure occurs off the residence premises, standard homeowners policies exclude that loss, but they may cover an ensuing loss on the residence premises caused by a covered peril, such as a resulting fire.

Governments sometimes seize or demolish property for public safety. Standard ISO homeowners policies generally exclude loss caused by governmental action, but the exclusion does not apply to destruction ordered by a governmental authority at the time of a fire to prevent its spread, if the fire loss would be covered. For instance, if local authorities demolish an outbuilding to create a firebreak that stops a spreading wildfire, that specific loss falls within the exception and can be covered.

Everyday maintenance issues are also excluded. Standard homeowners property coverage excludes losses resulting from wear and tear, marring, and gradual deterioration. Mechanical breakdown, latent defects, and inherent vice are excluded causes of loss. Smog, rust, corrosion, wet rot, and dry rot are excluded maintenance-related perils. Property damage caused by birds, vermin, rodents, or insects is excluded. Under the standard ISO HO-3 form, damage caused by an animal owned or kept by an insured is excluded from dwelling and other structures coverage, while personal property coverage is generally limited to named perils. In addition, settling, shrinking, bulging, or expansion of pavements, foundations, walls, or floors is excluded. Weather conditions are excluded from dwelling and other structures coverage under the HO-3 when they contribute to an excluded event, such as flood or earth movement. Finally, faulty, inadequate, or defective planning, zoning, design, workmanship, or maintenance is excluded.