Glossary

Exclusion

A policy provision that removes coverage for a stated cause, type of loss, property or circumstance that the coverage would otherwise reach.

Also called: policy exclusion, excluded peril, exclusions

An exclusion is a clause that takes something out of coverage. The policy first grants coverage, and the exclusions then carve away causes or situations the insurer does not intend to pay for. In an open perils policy, the exclusions are what define the limits of coverage.

The standard ISO HO-3 excludes, in Section I, ordinance or law (except for the limited additional coverage), earth movement, water (flood, surface water, sewer backup and certain groundwater), power failure off the premises, neglect, war, nuclear hazard, intentional loss and governmental action. Separate exclusions in the perils section address wear and tear, deterioration, settling and cracking, and the damage caused by insects, rodents or mold under the form's wording. Your insurer's own form may differ, and state amendatory endorsements change some of these.

Exclusions can often be bought back. Water backup, ordinance or law and earthquake coverage come through endorsements or separate policies, and flood coverage comes from the NFIP or a private flood insurer. Exclusions frequently contain exceptions too, such as fire that follows an earthquake, which remains covered.

Before you buy and again at renewal, ask which exclusions concern your region. The guide to what homeowners insurance doesn't cover and the flood exclusion entry are good places to continue.

Last reviewed October 10, 2026

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Related terms

Peril A specific cause of loss, such as fire, wind, theft or water, that a policy covers or excludes; it is the cause of the damage rather than the damage itself. Open perils Coverage that applies to any direct physical loss unless the policy specifically excludes the cause, so the insurer must point to an exclusion to deny a claim. Named perils Coverage that applies only to the causes of loss listed in the policy, so a claim is paid only if the damage came from one of them. Endorsement A written change attached to a policy that adds, removes or alters coverage, limits or conditions, and controls over the base form wherever the two conflict. Flood exclusion The standard homeowners provision that excludes flood, surface water, tides and overflowing water bodies, leaving flood damage to a separate flood policy. Earth movement A group of ground-shifting events, including earthquake, landslide, mudflow, subsidence and sinkhole, that homeowners policies exclude from coverage.

Related guides

Anti-concurrent causation clauses explained One policy sentence can bar a whole loss if an excluded cause like flood played any part. How it works, which states limit it, and how to document a claim. Appliance and HVAC breakdown: insurance or warranty? Homeowners insurance excludes a furnace or dishwasher that simply fails but pays for the water, fire or smoke damage it causes. Who pays for what. Washing machine, water heater and dishwasher leaks A sudden appliance leak is usually covered for the water damage and tear-out, but not for the failed appliance. Where slow leaks, drains and wear change that. Collapse coverage: what counts as a collapse The standard HO-3 pays only for abrupt collapse from listed causes such as hidden decay or a covered peril. Sagging, cracking and settling do not count. Dog bites, breed lists and homeowners liability Liability coverage usually pays when your dog bites someone, unless the insurer excluded the dog. How breed lists, bite history and state law work. Drones, firearms and other liability gray areas How homeowners policies treat hobby drones, guns, e-bikes and other gray areas: aircraft and intent exclusions, the business trap, and when to add coverage.

Related states

Nevada Nevada home insurance: State Farm leads a low-premium market, wildfire drives declines, a 2026 law allows wildfire exclusions, and there is no FAIR plan.