Common Things Not Covered By Your Home Insurance

Have you insured your home with Home Insurance? If not, you risk losing your home even after you’ve paid it off. If you have, it’s worth knowing what’s covered and what’s not. Budget Insurance knows the importance of buildings insurance and wants to help you ensure that you’re properly covered. 

What is an insurance exclusion?

When you have home insurance, you may think you’re covered for everything, but this is false. There are insurance exclusions, which means there are policies that eliminate cover for certain types of risks, situations or hazards. 

Homeowner’s insurance has exclusions and it’s important that you understand these so you can take out separate policies or safeguard your investment, like your home, to prevent damage or loss. To clarify this, we’ll explain an insurance exclusion and its existence. It’s also worthwhile to note that exclusions are outlined in your policy. If you already have a policy, check it and educate yourself about the exclusions. 

An exclusion is a clause in your insurance policy that specifies what the policy does not cover regarding your losses or damages. This means that if you make a claim regarding an excluded item, your insurer will reject it. As a result, you’ll need to pay out of your pocket for the loss or damage.

You’re probably wondering why insurance companies have exclusions? The bottom line is that insurers can’t cover every peril or hazard, especially things like catastrophic events or acts of war. 

There are several reasons for having insurance exclusions, including the following:

• Maintenance issues: Whether you’ve insured a vehicle or your home, you have to perform some maintenance. For instance, you have to service your car to minimise the impact of wear and tear. The same applies to a home or any other asset. If you don’t carry out maintenance and your asset gets damaged, or you lose it, you are responsible for bearing the cost of repair or replacement. 

• Catastrophic events: if, for instance, civil unrest erupted in a region of South Africa, causing extensive damage to vehicles or properties, insurance companies cannot bear the cost of replacing or fixing all of the damage. Therefore, this is considered an exclusion.

Catastrophic events such as war are excluded in insurance policies and may be covered by SASRIA. Other types of catastrophic events may be insured by specialised insurance.

• Insuring against public policy or law: Most insurance policies exclude cover for violations of the law, crimes and intentional injuries caused to a third party. The reason is that covering such events will be like supporting actions against public policy. For example, if you intentionally injure someone, you can expect your insurer to reject your claim.

Every insurance policy has exclusions expressly stated in the policy under the “Exclusions” heading. Usually, there are two types of exclusions: One for public liability and another for property damage or loss. Your policy might cover exclusions on a separate list. It’s crucial to check for these to ensure that you only make likely successful claims. 

What does home insurance not cover?

Home Insurance (also known as homeowner’s insurance) ideally consists of both Buildings Insurance and Home Contents Insurance working together. Building insurance covers the loss or damage to the physical property itself. This can include the primary residence, domestic quarters, carports, garages, fence, walls, pool and outbuildings. The key phrase is “physical property”, which includes permanent fittings and fixtures.

This insurance cover protects against loss or damage due to unforeseen circumstances and natural hazards; any exclusions will be listed in your policy.

Then there’s home contents insurance, which covers valuables inside the property. This means that building insurance doesn’t cover you for loss or damage to items such as movable furniture or kitchen appliances. To cover these items, you need home contents insurance. It will cover you for loss or damage due to fire, burglary, theft, or natural disasters.

There are still other items, such as your laptop, handbags, cellphones, and jewellery, that you may want cover for. The kind of insurance needed for this is called portable possessions insurance. It covers the loss or damage to items you might carry when moving outside your home. You need to specify these in your policy document.

Common exclusions in home insurance

Understanding what home insurance doesn’t cover is one thing. However, you still need to know what it excludes. Here are the common items it excludes:

1. Acts of riot: This is primarily covered by the South African Special Risks Insurance Association (SASRIA)[3] if you’re insured. You’ll have a separate policy document from SASRIA.

2. Intentional damage: You will not be protected if you deliberately damage any portion of your building structure. Making a claim for this is considered fraudulent, and you might be prosecuted for committing a crime.

3. Borehole and swimming pool equipment: Although your swimming pool will be covered, items such as a swimming pool water pump are not included in the cover. 

4. Poor maintenance: Building structures may wear down over time due to normal use. For instance, gutters may become packed with dirt, which could result in roof damage. Building insurance protects you financially in case of accidental loss or damages. General wear and tear does not fall within this scope. You need to do basic maintenance to prevent major expenses. For instance, if there’s a water pipe leak, fix it as soon as possible.

5. Infestations: A home might be infested with vermin, termites, or other pests that can damage portions of the building. For instance, termites may attack any wood structures and lead to the need to make expensive repairs. There may be exceptions, such as if a mouse interferes with electrical wiring and causes a fire. It’s important to check your policy wording to ensure this kind of event is covered.

6. Defective workmanship:  Building insurance won’t cover the  repairs needed to fix the problem if a builder or other tradesman performs faulty work.

7. Government action: Generally, home insurance doesn’t cover you if the government confiscates your house or the land it stands upon. The exception might be if the government is trying to protect your property.

8. Nuclear hazards: Building insurance doesn’t cover losses or damages due to nuclear accidents. These should be covered by the nuclear company responsible for the accident.

9. Renovations: Home renovations are often the homeowner's sole responsibility. If you want this covered, you may also have to seek a policy that covers renovations.

10. Using your home for business purposes: Home insurance premiums are typically charged assuming your house is used as  a dwelling. Using the home to generate income introduces new types of risks. If your home gets damaged or you lose a permanent fixture due to business activity, home insurance won’t cover you. Instead, you need to have a business insurance policy.

11. Failure to disclose pertinent information: It’s important to disclose all the information pertaining to your home and any other fixed structures. If you fail to do so and a loss or damage occurs, your building insurance won’t protect you financially.

12. Damage due to tree felling: Whether you or a professional cuts a tree and it falls on your house and damages it, building insurance won’t cover you. The same applies if your home gets damaged by tree roots.

13. Illegal activity:  Building insurance won't cover you if you perform an illegal activity in your home and it damages the house.

Your policy will include a comprehensive list of exclusions. Make sure that you don’t expose yourself to those excluded hazards.

Get a home insurance quote from Budget Insurance

Do you want to protect yourself financially against loss or damage to your house? If so, the best way to do this is to get home insurance. Budget Insurance makes it easy to get this type of insurance. Simply request a free and no-obligation online building insurance quote. For any questions, our trained insurance consultants will gladly assist you.