Insurance exclusions
The part of the policy that tells you what you are not covered for.
An exclusion is the part of an insurance policy that lists what is not covered. General liability does not pay for damage to the association's own buildings. Standard property and homeowners policies exclude flood, earthquake, and sewer backup by default. Read the exclusions section, not just the coverage grant, to know what still needs its own policy.
Every policy excludes something, on purpose
An insurance policy is a list of promises with limits attached. The coverage grant says what the insurer will pay for. The exclusions section says what it will not, and insurers write exclusions to keep pricing predictable for the risks they actually intend to cover.
General liability is the clearest example a board runs into. It responds to injury or property damage claims tied to common area use and normal association operations, not to damage to the association's own buildings.
"[General liability] usually does not cover damage to the HOA's own buildings, roofs, fences, signs, equipment, or other association property."
Source: HOA General Liability: What Premises and Operations Really Covers, StarNet Insurance Group
That gap is exactly why a separate property insurance policy exists. General liability and property insurance are different lines built to cover different losses, and treating one as a backstop for the other is how a claim gets denied.
The exclusions that surprise boards most
Four exclusions show up in almost every master policy, and they catch boards off guard because they sound like they should already be covered.
| Exclusion | What is excluded | Where the coverage lives instead |
|---|---|---|
| Flood | Water that rises from outside the structure | A separate flood policy, often the NFIP's RCBAP built for associations |
| Earthquake | Ground movement and shaking | A separate earthquake policy or endorsement |
| Sewer and sump backup | Water or sewage backing up through a drain or a failed pump | Added by endorsement, see sewer backup coverage |
| Pollution cleanup | Almost any irritant or contaminant, defined broadly | A separate pollution policy |
"Flood damage is excluded under standard homeowners and renters insurance policies."
Source: Which disasters are covered by homeowners insurance?, Insurance Information Institute
Pollution works the same way. General liability's pollution exclusion is written around a very broad definition of pollutant, one wide enough to reach almost any solid, liquid, gas, or thermal irritant, which is why a real pollution exposure needs its own policy rather than an amendment to general liability.
Close the gap before the loss, not after
Every exclusion above has a fix, but the fix has to be in place before the loss happens. An endorsement bought the week after a sewage backup does not cover that backup. At renewal, ask the broker directly which of these exclusions apply to your policy and what it costs to add each one back.
Which endorsements are available, what they cost, and whether a specific substance counts as an excluded pollutant vary by insurer, by state, and by your own policy language. Bring the question to your broker, not to a generic assumption about what "should" be covered.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
The HOA's clubhouse roof is damaged in a storm. The board files a claim under the general liability policy. What happens?
The association's master property policy never mentions flood. A storm surge floods the ground floor common areas. What is true?
Sewage backs up through a floor drain into a ground floor unit. The owner's HO-6 policy has no special endorsements. What happens?
- HOA General Liability: What Premises and Operations Really Covers, StarNet Insurance Group
- Which disasters are covered by homeowners insurance?, Insurance Information Institute
- The CGL Pollution Exclusion, IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
- 10 Steps to a Well-Designed HO 6 Policy, IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
Insurance
Next, see how flood insurance fills the biggest gap on this list.
Which endorsements are available, what they cost, and whether a specific substance counts as an excluded pollutant vary by insurer, by state, and by your own policy language.