When it comes to home or automobile insurance there is a common misconception that once insurance is arranged anything that can happen will be "insured". Given the very nature of humans, the list of risks which could lead to a financial loss are limitless. With due consideration given to logic and common sense and reasonable expectations, certainly most of the risks that could lead to financial loss are insurable and most areas are insured.
However, it is important to understand that even the very finest insurance policy contracts have standard exclusions, conditions or limitations for risks that are not insured.
Here are a few examples of situations that might arise where there is no coverage.
- Loss is sustained by an peril ("cause") not covered under the particular policy carried. Many policies,
especially of the basic or standard variety, list only those things that you are insured for e.g. fire, lightning, and burst pipes. You spill a can of paint on your $20,000 living room broadloom or your sewers back up and no sewer back-up coverage - not insured (always know the type of insurance you carry).
- Your home is insured as a typical occupied residential premises and you vacate it without notifying your insurer and taking the necessary steps. A few months later, still during the policy period, it is destroyed by fire - no insurance (vacancy provisions).
- A retaining wall or even your home foundation shifts from earth movement.
- The roofing contractor did a shoddy job and your roof is leaking (faulty workmanship or poor design).
- Home is infested with termites or other vermin.
- The river nearby rises over it's banks during heavy rainstorms and floods your home and the surrounding neighbourhood (flood).
- Your furnace and air-conditioning system simply "breaks down".
- You injure an intruder in your home and they sue (intentional bodily injury).
- The tenant in your basement apartment makes off with all of your electronics never to be heard from again.
- You leave your home during the winter for a few days without turning off the water or having the inside checked every day. Upon returning, the furnace has malfunctioned, water pipes have frozen, and the inside is a frozen waste-land.
- A customer sustains injury when their car is brought in to your "home repair garage" (business use)
- You sell your valuable musical instrument collection and it is picked up by the buyer before the cheque bounces leaving you with nothing.
- Your vehicle is damaged or totalled and you are convicted of an impaired driving offense.
- An accident has occurred and there has been a material change in your policy or information not disclosed to your insurer.
- You hit a stationary object on the highway and do not have collision insurance.
- You or anyone driving your car is not properly licensed.
Note: This is not a comprehensive list of the various exclusions, limitations or conditions that form part of every insurance policy. It is intended only as a guide. To fully understand the scope of your insurance the policy document itself must always be referred to.