Common Insurance Exclusions: What Your Home, Auto, Health and Travel Policies Don't Cover

Why exclusions exist

Exclusions keep insurance affordable and focused. Some risks are catastrophic and need specialized pricing (flood, earthquake). Others are within the policyholder's control (maintenance, intentional acts), or belong in another type of policy (business activities, professional mistakes). An exclusion is not a trick, but you need to know where your policies stop. The NAIC advises checking exclusions as carefully as coverage, since every policy is different.

Homeowners and renters insurance

• Flood. According to the NAIC, flood is not typically covered by most homeowners and renters policies. Coverage is available through the National Flood Insurance Program, managed by FEMA, and from private insurers.
• Earth movement. The NAIC warns that damage from earth movement is more common than you think and may not be included in your policy. Earthquake coverage is usually sold as an endorsement or a separate policy.
• Mold. Homeowners policies often exclude mold damage or limit it to small amounts.
• Infestations. Damage from termites, rodents and other pests is not typically covered.
• Wear, tear and maintenance. Insurance is designed for sudden and accidental losses, not gradual deterioration such as an aging roof or a slow plumbing leak.
• Home-sharing. Many homeowners policies will not cover guest injuries or property damage when you rent out your home, the NAIC notes.
• Business property and activities. A home office, inventory or customer visits may need an endorsement or a business owner's policy.

Auto insurance

• Business use and driving for hire. The NAIC explains that personal auto insurance typically excludes business use or times when the driver is "available for hire." Rideshare and delivery drivers need a rideshare endorsement or commercial coverage.
• Intentional damage and racing. Deliberate acts and organized racing are excluded.
• Your own car under liability-only coverage. Liability pays others. Damage to your own vehicle needs collision and comprehensive coverage.
• Mechanical breakdown and wear. These are maintenance costs, not accidents.

Health insurance

Under the Affordable Care Act, Marketplace plans and most other plans cannot refuse to cover pre-existing conditions. HealthCare.gov notes the exception for grandfathered individual policies bought on or before March 23, 2010. Common gaps still exist:

• Adult dental and vision care are not essential health benefits, so medical plans often leave them out.
• Out-of-network care may be excluded or covered at a much lower level, depending on the plan type.
• Cosmetic procedures and services that are not medically necessary are typically excluded.

Travel insurance

The NAIC lists common travel insurance exclusions: pre-existing health conditions, pandemics, civil and political unrest, pregnancy and childbirth, and risky activities. Some policies offer a pre-existing condition waiver if you meet the conditions stated in the policy. "Cancel for any reason" upgrades widen cancellation coverage for an extra cost. Read the definition of a covered reason before you rely on trip cancellation coverage.

Business insurance

• Professional mistakes. General liability covers bodily injury and property damage, not errors in advice or services. That is the job of professional liability (E&O) insurance.
• Employee injuries. These belong under workers' compensation and employers liability, not general liability.
• Vehicles. Business vehicles need commercial auto coverage.
• Cyber incidents. Traditional property and liability policies may exclude or limit data breach and ransomware losses. Cyber insurance is designed for them.
• Pollution. Most liability policies limit or exclude pollution, which requires specialized environmental coverage.

Exclusions found in almost every policy

Across lines, you will usually see exclusions for intentional acts by the insured, war and military action, and nuclear hazards. Fraud or concealment in the application or claim can void coverage entirely.

Where to find the missing coverage

Next steps

• List the risks that would hurt you most, then check each policy's exclusions against that list.
• Read about hidden policy pitfalls and how to read a policy.
• Policies are issued by licensed insurers and placed through licensed producers in your state. Request a quote to close the gaps.