As an insurance broker serving Ontario and the Greater Toronto Area (GTA), I’ve seen too many clients caught off guard by what their home and auto insurance policies don’t cover. Understanding these exclusions is crucial to avoid costly surprises when you need your coverage most. Let’s break down the most common exclusions and what you can do to protect yourself.
What Are Insurance Exclusions?
Exclusions are specific situations, perils, or types of property that your insurance policy will not cover. They’re designed to clarify the limits of your coverage and help keep premiums affordable by excluding high-risk or uninsurable events.
Common Home Insurance Exclusions in Ontario
Even the most comprehensive home insurance policies in Ontario have exclusions. Here are the most frequent ones:
Wear and Tear: Damage from gradual deterioration, rust, or corrosion is not covered. Insurance is for sudden, unexpected events—not maintenance issues.
Flooding and Water Damage: Standard policies exclude flooding from overland water, sewer backup, or water entering through cracks. You’ll need to purchase add-ons for this protection.
Mould and Rot: Damage from mould, rot, or slow leaks is typically excluded, as these are considered preventable with proper maintenance.
Vermin and Infestations: Damage caused by insects, rodents, or other pests is not covered.
Earthquakes and Ground Movement: Losses from earthquakes, landslides, or earth movement are excluded unless you buy specific endorsements.
Intentional or Criminal Acts: Any loss resulting from intentional, fraudulent, or criminal acts by the policyholder is not covered.
Governmental Seizure: Losses due to government action, such as property seizure, are excluded.
Common Auto Insurance Exclusions in Ontario
Ontario’s auto insurance policies also have important exclusions you should know about:
Unlicensed or Excluded Drivers: No coverage if the vehicle is operated by someone without a valid license or someone specifically excluded from the policy.
Unauthorized Use: If your car is used without your consent, or you knowingly allow an unlicensed or excluded driver to operate it, coverage is void.
Commercial Use: Using your car as a taxi, rideshare, or for delivery without proper coverage is excluded.
Wear and Tear/Mechanical Breakdown: Damage from normal wear, rust, or mechanical failure is not covered.
Rented or Leased to Others: If you rent or lease your car to someone else, standard coverage does not apply.
Criminal Acts: Losses occurring while committing a criminal act, such as impaired driving, are excluded.
Why Exclusions Matter: A Broker’s Perspective
As brokers, we see firsthand how exclusions can impact GTA homeowners and drivers. For example, many clients assume water damage is always covered, only to discover that basement flooding requires a separate endorsement. Others are surprised when a claim is denied because a family member, excluded from the policy, was driving at the time of an accident.
Our advice: review your policy annually and ask your broker about any gaps in coverage. Consider add-ons for flood, sewer backup, or earthquake protection, and always disclose all drivers in your household.
Frequently Asked Questions (FAQs)
1. Does home insurance cover basement flooding in Toronto?
No, standard policies exclude overland flooding and sewer backup. You need to purchase additional coverage for these risks.
2. Are my personal belongings in my car covered by auto insurance?
No, personal items stolen from your car are covered under your home insurance, not your auto policy9.
3. What happens if an excluded driver uses my car?
If an excluded driver is involved in an accident, your insurance will not cover any damages or liability.
4. Is damage from vermin or pests covered by home insurance?
No, damage from pests like mice, termites, or bedbugs is excluded.
5. Can I get coverage for earthquake or flood damage?
Yes, but you must purchase these as optional endorsements. They are not included in standard policies3.