Open perils coverage is broad, but it is not unlimited. While coverage begins with the assumption that a loss is covered, exclusions carve out specific situations where insurance does not apply. Many denied claims under open perils coverage happen not because coverage is narrow, but because homeowners misunderstand or overlook exclusions.
Understanding common exclusions under open perils coverage helps homeowners avoid false assumptions and better predict how a claim will be handled.
Why Exclusions Matter in Open Perils Coverage
Open perils coverage relies heavily on exclusions to define its boundaries. Unlike named perils policies, which list what is covered, open perils policies list what is not covered.
If an exclusion applies, coverage does not exist—even though the policy is otherwise broad. Exclusions are not optional or flexible; they are enforceable parts of the policy.
Wear and Tear
Wear and tear is one of the most common exclusions under open perils coverage. Insurance is designed to cover sudden and accidental damage, not gradual deterioration.
Examples of excluded wear and tear include:
- Worn roofing materials
- Aging plumbing
- Electrical systems reaching the end of their lifespan
- Flooring worn down over time
Even if damage becomes noticeable suddenly, coverage may be denied if wear and tear is the underlying cause.
Gradual Deterioration
Closely related to wear and tear is gradual deterioration. Damage that develops slowly over weeks, months, or years is generally excluded.
Examples include:
- Long-term water seepage
- Slowly developing mold
- Structural weakening over time
- Corrosion or rust
Open perils coverage does not apply to losses that result from ongoing conditions rather than sudden events.
Mechanical Breakdown
Mechanical breakdown of appliances or systems is typically excluded under open perils coverage. Insurance does not cover internal failures caused by defects, age, or malfunction.
For example:
- Furnace failure
- Air conditioner breakdown
- Appliance motor failure
Separate equipment breakdown coverage may be required for these losses.
Flood
Flood damage is almost universally excluded under open perils homeowners policies. Flood is typically defined broadly and includes:
- Surface water
- Overflow of bodies of water
- Storm surge
- Mudflow
Flood coverage requires a separate policy.
Earthquake and Earth Movement
Earth movement exclusions are common and include:
- Earthquakes
- Landslides
- Sinkholes in some policies
- Ground shifting or settling
Coverage for earth movement typically requires separate endorsements or policies.
Mold and Fungi (Related to Excluded Causes)
Mold is often excluded unless it results directly from a covered cause of loss. If mold develops due to long-term moisture, poor ventilation, or excluded water damage, coverage does not apply.
Even when covered, mold coverage may be limited.
Intentional Damage
Intentional acts by the homeowner or insured household members are excluded. Insurance does not cover deliberate destruction or damage.
This includes:
- Intentional property damage
- Fraudulent claims
- Staged losses
Government Action
Damage caused by government action is typically excluded. This includes:
- Seizure or destruction of property
- Demolition ordered by authorities
- Zoning or code enforcement actions
Insurance does not cover losses caused by legal authority decisions.
War and Nuclear Hazards
War-related damage and nuclear hazards are standard exclusions. While rare, these exclusions exist to limit catastrophic risk.
Neglect and Failure to Protect Property
Damage resulting from neglect or failure to take reasonable steps to protect property is excluded.
Examples include:
- Failing to repair known leaks
- Allowing damage to worsen
- Not taking steps to prevent further loss after an incident
Insurance expects homeowners to mitigate damage.
Certain Water Damage Scenarios
While sudden water damage may be covered, certain water-related situations are excluded:
- Water backing up through sewers or drains
- Water seepage through foundations
- Long-term leaks
Some of these risks may be covered through endorsements.
Animals and Insects
Damage caused by animals, rodents, or insects is often excluded. This includes:
- Termite damage
- Rodent damage
- Insect infestations
These losses are considered maintenance issues rather than sudden accidents.
What Happens When an Exclusion Applies
When an exclusion applies, coverage does not exist, regardless of how unexpected or costly the damage may be. This can be frustrating for homeowners who assumed open perils coverage meant near-universal protection.
Understanding exclusions helps prevent these surprises.
How Exclusions Are Applied in Claims
Insurers must demonstrate that an exclusion applies. This often involves:
- Inspecting damage
- Reviewing timelines
- Evaluating maintenance history
- Consulting experts
If evidence supports an exclusion, the claim is denied.
Common Misunderstandings About Exclusions
Homeowners often mistakenly believe:
- Exclusions are rare
- Open perils means “everything is covered”
- Maintenance-related damage is included
- Flood is covered under homeowners insurance
These misunderstandings lead to denied claims.
Why Reviewing Exclusions Is Essential
Exclusions define the true limits of open perils coverage. Homeowners who do not review exclusions may misunderstand their actual protection.
Understanding exclusions helps homeowners:
- Avoid unrealistic expectations
- Identify coverage gaps
- Purchase endorsements when needed
- Make informed coverage decisions
Practical Takeaway
Open perils coverage provides broad protection, but exclusions are the boundaries that matter most. Coverage exists until an exclusion applies—and when it does, coverage stops completely.
Knowing common exclusions under open perils coverage allows homeowners to understand where insurance protection ends and where additional coverage or maintenance responsibility begins.
Related Guides