The Tennessee Homeowner’s Guide to Insurance Policy Exclusions

When we buy homeowners insurance, we mostly think about what we want it to cover: a fire, wind or hail damage, earthquake – those types of things. What most people don’t think about (and what they really should) is what their policies don’t cover. These are called exclusions, and they can vary from policy to policy. Knowing what your policy excludes is absolutely critical.

All-risk policies vs. named perils policies

Property insurance policies are generally one of two types: an all-risk policy or a named peril policy. All-risk policies cover everything except losses that are specifically excluded or limited by the policy. On the other hand, named peril policies cover nothing except for specifically listed perils, such as fire, theft, etc. Of course, all-risk policies are preferable, but many property owners don’t discover the difference until it’s too late.

The average all-risk policy will begin with language that indicates that coverage is provided for all risks of direct physical loss except for certain perils that are not covered. So, for example, if your dog destroys your couch and there is no exclusion for damage caused by pets, then the damage to the couch should be covered. In contrast, if you have a named perils, the damage to the couch will not be covered unless it specifically says that damage caused by pets will be covered by the policy (which is unlikely).

Exclusions to think about

Because the types of exclusions your policy has will vary from insurer to insurer (and policy to policy), it is impossible to list out here all of the various exclusions that may apply. However, there are some common exclusions that are present in most insurance policies, and we’ll cover some of these in a series of posts to better help you make better choices as a policyholder. We plan on covering in some degree:

• Wear and tear/ deterioration
• Improper workmanship/materials/design (that often has an exception for resulting or ensuing damage)
• Intentional acts
• Earth movement (earthquake/sinkhole, etc.)
• Flood (surface water)
• Mold
• Pollution
• Slow leaks (many policies exclude water losses occurring over a period of “weeks, months or years” – must be sudden event such as a pipe busting as opposed to a slow drop)

These are all commonly excluded perils, but that doesn’t mean they are the only ones. The insurance world is full of tricks, traps, and loopholes, and it is often important to work with a skilled Tennessee insurance dispute attorney to best present your insurance claim. If you think your insurer is acting in bad faith, or trying to avoid making payment on your claim, you definitely want to see a lawyer before you take another step.

At McWherter Scott & Bobbitt, we know insurance. We’ve helped policyholders throughout Tennessee and other parts of the Southeast obtain the compensation they need to rebuild after their home has been damaged. To make an appointment with an experienced Tennessee insurance dispute attorney like Brandon McWherter or Clint Scott, we invite you to contact us. With offices in Nashville, Chattanooga, Memphis and Jackson, our team is where you need us, when you need us. Discover what we can do for you.