Building Insurance Exclusions: The Basics You Need to Know

When you buy a building insurance policy you expect it to protect your property against most problems. But many policies leave out big‑ticket items that can cost you a lot. Knowing what’s excluded can save you from nasty surprises when you need to file a claim.

Common Exclusions You’ll See in Policies

Most insurers won’t pay for foundation cracks that are considered “settlement” or “normal wear and tear.” If the ground shifts slowly over years, they often label it an exclusion. The same goes for mold that forms because of poor ventilation or delayed repairs – insurers tend to see it as a maintenance issue, not a sudden event.

Roof damage is another hot spot. Policies may cover storm‑related tears but exclude damage caused by lack of upkeep, like missing shingles that weren’t replaced in time. Floods, unless you buy a separate flood endorsement, are also left out in many standard building policies.

Other frequent exclusions include water damage from burst pipes that weren’t insulated, termite or pest damage, and any repair work that should have been done by a qualified professional before the incident.

How to Minimize the Impact of Exclusions

The best defence is to read the fine print. Look for sections titled “Exclusions,” “Conditions,” or “Not Covered.” If anything sounds vague, ask your broker to explain it in plain language.

Consider adding endorsements for the gaps you can’t afford to cover yourself – for example, a separate flood policy or a rider that includes mold remediation. Keeping up with regular maintenance, like sealing cracks and servicing your roof, also keeps you from triggering an exclusion.

Finally, keep good records. Photos, repair invoices, and professional inspections prove that you didn’t neglect the property. When a claim goes to the adjuster, solid evidence can turn a “not covered” into a paid claim.

Understanding building insurance exclusions isn’t fun, but it’s a small effort that pays off when you actually need a payout. Stay informed, fill the gaps, and protect your investment the right way.