Published on February 26th, 2026

What Homeowners Insurance Doesn't Cover: Common Policy Exclusions Explained

Homeowners insurance provides essential protection for your home and belongings, but it's not an all-encompassing safety net. Every policy includes exclusions, specific situations, perils, and types of damage that aren't covered. 

This isn't about insurers trying to deny claims. Exclusions are intentional and serve specific purposes: keeping premiums affordable, preventing fraud, encouraging proper maintenance, and separating risks that need specialized coverage. The key is knowing where your standard policy stops so you can fill those gaps.

This guide breaks down the most common homeowners insurance exclusions in plain language, explains why they exist, and shows you how to address the gaps that matter most to your situation.

What is a homeowners insurance exclusion?

An exclusion is a specific type of loss or damage that your insurance policy won't pay for. Insurance companies build exclusions into policies to manage risk effectively. Without exclusions, premiums would be unaffordable because insurers would need to price in every conceivable risk.

It's important to distinguish exclusions from limits and endorsements.

• A coverage limit restricts how much the insurer will pay for a covered event. 

• An exclusion means the event isn't covered at all. 

• An endorsement (also called a rider) is an add-on that can extend coverage to fill specific gaps, sometimes including exclusions.

When you read your policy, exclusions are typically spelled out in a dedicated section. If something isn't explicitly excluded and falls under your policy's covered perils, it's generally covered, subject to your deductible and coverage limits.

Named perils vs. open perils: why coverage has limits

Understanding how your policy is structured helps explain why exclusions exist in the first place.

• Named perils policies list specific events that are covered, like fire, theft, vandalism, or hail. If something happens that's not on the list, it's not covered. With named perils, the burden is on the policyholder to show that the damage came from a covered event.

• Open perils policies (also called "all risk" policies) work in reverse: they cover everything except what's specifically excluded. This provides broader protection, but it also makes the exclusions list more important. With open perils, the insurer must prove that an exclusion applies to deny a claim.

Most modern homeowners policies use a hybrid approach: open perils for the dwelling itself and named perils for personal property.

The most common homeowners insurance exclusions

Here are the exclusions you're most likely to encounter in a standard homeowners insurance policy.

1. Flood damage

What it means: Damage from rising water, surface water flooding, storm surge, or overflow of bodies of water is excluded from standard homeowners policies.

Why it's excluded: Flooding tends to affect wide geographic areas simultaneously, creating catastrophic losses that would bankrupt private insurers if included in standard policies. Flood risk is highly concentrated in certain regions, making it impractical to spread the cost across all policyholders.

Common scenario: A heavy rainstorm causes a nearby river to overflow, flooding your basement with three feet of water. Your homeowners policy won't cover the structural damage or ruined belongings.

The solution: Purchase separate flood insurance through the National Flood Protection Program (NFIP) or private flood insurers. 

2. Earth movement

What it means: Earthquakes, landslides, sinkholes, mudflows, and other ground movement are typically excluded.

Why it's excluded: Like flooding, earth movement can cause widespread catastrophic damage in specific geographic areas. The cost to insure these risks requires specialized underwriting and risk pooling.

Common scenario: An earthquake causes foundation cracks and structural damage to your home. Even minor tremors can result in tens of thousands of dollars in repairs that your standard policy won't cover.

The solution: Purchase earthquake insurance as a separate policy or endorsement. This is especially important if you live in seismically active regions like California, the Pacific Northwest, or along fault lines.

3. Wear and tear / maintenance issues

What it means: Damage resulting from gradual deterioration, lack of maintenance, or normal aging of your home is not covered.

Why it's excluded: Insurance is designed to protect against sudden, accidental events—not the predictable costs of home ownership. Allowing claims for deferred maintenance would create a moral hazard and dramatically increase premiums.

Common scenario: Your roof has been leaking slowly for years, and you never repaired it. Eventually, the ceiling collapses. Because the damage resulted from long-term neglect rather than a sudden event, it's excluded.

The solution: Maintain your home proactively. Regular inspections, timely repairs, and preventive maintenance are your responsibility as a homeowner and your first line of defense against major problems.

4. Mold and rot

What it means: Fungal growth, mold, wet or dry rot, and bacteria are generally excluded unless they result directly from a covered peril.

Why it's excluded: Mold typically develops over time due to moisture problems, poor ventilation, or maintenance issues. It's considered preventable with proper home care.

Common scenario: A small plumbing leak goes unnoticed for months, creating a mold problem behind your bathroom wall. Because the leak was gradual and the mold developed over time, cleanup and remediation costs likely won't be covered.

The exception: If a sudden, covered event (like a burst pipe) causes water damage and mold appears shortly after, your policy may provide limited mold remediation coverage, typically capped.

The solution: Control moisture, address leaks promptly, ensure proper ventilation, and conduct regular home inspections.

5. Pest infestations

What it means: Damage from termites, rodents, birds, insects, or other vermin is excluded.

Why it's excluded: Pest damage is considered preventable through regular maintenance, inspections, and pest control. It typically occurs gradually rather than suddenly.

Common scenario: Termites have been eating away at your home's wooden framing for years, requiring extensive structural repairs. Your policy won't pay for the damage or the cost of extermination.

The solution: Schedule regular pest inspections, especially for termites. Address infestations immediately and maintain the exterior of your home to prevent entry points.

6. Sewer backup / drain overflow

What it means: Water damage from sewers, drains, or sump pumps backing up into your home is typically excluded.

Why it's excluded: Sewer backups can cause extensive damage and often occur in patterns related to aging infrastructure or heavy rainfall, creating concentrated risk.

Common scenario: During a heavy rainstorm, the municipal sewer system becomes overwhelmed and backs up into your basement, flooding it with contaminated water.

The solution: Add a sewer backup endorsement to your policy. This relatively inexpensive add-on (often less than $100 annually) can provide $10,000–25,000 or more in coverage for this specific scenario.

7. Intentional damage

What it means: Any damage you cause deliberately to your own property is excluded.

Why it's excluded: Allowing coverage for intentional acts would create obvious moral hazard and encourage insurance fraud.

Common scenario: You deliberately set a fire or vandalize your own home to collect insurance money. Not only will your claim be denied, but you'll likely face criminal charges for insurance fraud.

The solution: None needed; this is a fundamental principle of insurance law designed to prevent fraud.

8. Government action

What it means: Seizure, confiscation, or destruction of your property by government order is excluded.

Why it's excluded: Government actions like eminent domain or code enforcement demolitions involve legal and political processes outside the scope of property insurance.

Common scenario: The city condemns your property for a new highway project or orders demolition because the structure violates safety codes.

The solution: Legal recourse through the government process, which may include compensation through eminent domain proceedings. Insurance won't help here.

9. War / nuclear hazard

What it means: Damage from war, military action, nuclear reaction, radiation, or radioactive contamination is excluded.

Why it's excluded: These catastrophic events would create losses so widespread that no private insurer could cover them. They're considered "uninsurable" risks.

Common scenario: While extremely rare for most homeowners, this exclusion would apply to property damage from acts of war, insurrection, or nuclear accidents.

The solution: These risks generally have no private insurance solution available. Government disaster relief programs may provide assistance in extraordinary circumstances.

10. Business liability at home

What it means: If you run a business from home, your homeowners policy provides very limited or no coverage for business-related liability or property claims.

Why it's excluded: Commercial activities create different risk profiles that require specialized underwriting. Mixing personal and business coverage would be difficult to price accurately.

Common scenario: A client visits your home office, trips, and sues you for their injuries. Or business equipment is stolen from your home office. Your homeowners policy likely won't cover these losses.

The solution: Purchase a business owners policy (BOP) or add a home business endorsement to your policy. Even small home-based businesses should have proper commercial coverage.

11. Utility power failure

What it means: Damage caused by power outages that originate off your property is typically excluded.

Why it's excluded: Utility failures beyond your property line are outside your control and often affect many people simultaneously. They're considered infrastructure issues rather than insurable perils.

Common scenario: A power outage caused by a storm damages utility lines two blocks away. Your power is out for three days, and all the food in your refrigerator and freezer spoils. Your homeowners policy likely won't reimburse you for the lost food.

The exception: If the power outage results from covered damage to your own property (like a tree falling on your electrical system), the resulting losses may be covered.

The solution: Some policies offer endorsements for food spoilage or refrigerated medicine. Consider backup power options for essential systems.

12. Ordinance or law upgrades

What it means: The additional cost to rebuild your home to current building codes, if they've changed since your home was built, is often excluded or severely limited.

Why it's excluded: Code requirements constantly evolve, and the cost to bring an older home up to modern standards can far exceed the cost of basic repairs, creating unpredictable liabilities for insurers.

Common scenario: A fire destroys part of your 1970s home. Current building codes require updated electrical, plumbing, and structural elements that didn't exist when your home was built. The extra cost to meet code may not be covered.

The solution: Add an "ordinance or law" endorsement to your policy. This coverage helps pay for the increased cost of rebuilding to current codes after a covered loss.

Special situations that may limit or void coverage

Beyond standard exclusions, certain circumstances can limit your coverage or even void your policy entirely:

• Vacant homes: If your home is vacant (typically defined as unoccupied for 30-60 consecutive days), many policies reduce coverage or exclude certain perils like vandalism and theft. Long-term vacancy may require specialized vacant home insurance.

• Renting your property: Once you rent out your home, even occasionally through services like Airbnb, your standard homeowners policy may not provide adequate coverage. You may need a landlord policy or short-term rental endorsement.

• Unreported renovations: Major renovations that change your home's value, square footage, or risk profile should be reported to your insurer. Failing to do so could result in denied claims or coverage gaps.

• High-risk activities: Operating certain businesses from home, keeping exotic animals, or installing high-risk features (like trampolines or certain dog breeds) may create coverage limitations unless specifically disclosed and endorsed.

How to close coverage gaps

Understanding exclusions is the first step. Here's how to address the gaps that matter to you:

A quick exclusions checklist

The bottom line

Homeowners insurance provides powerful protection, but not unlimited. By understanding what your policy doesn't cover, you can make informed decisions about additional coverage, take proper maintenance responsibility, and avoid costly surprises. The goal isn't insurance that covers absolutely everything, but the right combination of coverage, endorsements, and personal responsibility for your specific situation.

Homeowners insurance exclusions FAQ