Property Insurance: Policy Exclusions vs Policy Limitations

While it’s not much fun, it’s important to read and understand your policy, especially the fine print. Find it confusing? You’re not alone. Like many industries, insurance has its own jargon: for instance, there’s a difference between a catastrophe, a hazard and a peril—and it’s not just about a given degree of damage. Among the most misunderstood provisions in homeowner’s policies are exclusions and limitations. In both cases, the insurance company is “taking away” some coverage under specific conditions, which must be spelled out in the policy. Knowing what your homeowner’s insurance does and does not cover, as well as the circumstances and time limits that may apply, can make the difference between an approved and denied insurance claim.

Policy exclusions

An exclusion is described in an insurance policy as a condition or loss that is not covered; thus, it is excluded. Items (or perils) may exclude those that are not specifically named, but again, it depends on the type of policy you have. For instance, an HO-2 policy will cover you against named perils that include fire and smoke, explosions, lightning, vandalism and even (in the unlikely event you would ever encounter one in Florida) volcanic eruptions, as well as falling objects, sudden and accidental bursting of pipes, accidental discharge of water or steam and sudden, among others.

Typical policy exclusions include damage from:

      • Earthquakes
      • Floods (which require special flood insurance)
      • Loss of property caused by neglect, defective maintenance or faulty construction
      • Intentional loss (meaning that you purposely destroyed your property)
      • Acts of war
      • Nuclear hazards
      • Power failures

Among the more common, and controversial, of these is the 14-day exclusion for water damage. Essentially, this means that any damage that occurred over a period of 14 or more days. Unfortunately, gradual, or long-term, damage may be difficult to see within that two-week period; however, the Florida courts have ruled that any damage occurring up to and including the 13th day is covered.

Policy limitations

While exclusions are those losses which are not covered by your policy, limitations generally describe maximum dollar amount that will be paid for a covered loss. For example, if a guest is hurt on your property and you are found to be legally responsible for their injuries, your liability coverage may cover only up to a certain amount, less the deductible. This is the same for dwelling coverage (the amount of money you would receive to cover the cost of rebuilding) and similar covered damages.

It is a good idea to periodically review your policy and determine if you will need more coverage, based on any upgrades, additions or changes.

Learn more about getting full and fair compensation for a Florida property insurance claim

At Johnson & Williams, P.A., our property insurance attorneys fight to get you the compensation you expect and deserve for damage to your home. We know fine print, and won’t let the insurance company get away with denying a legitimate claim. To discuss your situation, please contact us online or call our office at (407) 245-1268 to schedule a free consultation.