COVID-19 pandemic highlights exclusions in homeowners insurance

Pandemic shines light on insurance exclusions The COVID-19 pandemic has changed a lot – including how insurance companies are communicating with their customers.

VANCOUVER — You may have received a notice in the mail regarding your homeowners insurance. Insurance companies want to be clear – communicable diseases are typically not covered under your homeowners insurance policy.

The pandemic has prompted some insurance companies to ensure you know what is covered and they are spelling it out in plain language.

The Co-operators recently sent out a notice regarding homeowners insurance that stated:

“Attached to your renewal policy you will find a new property exclusion, the Communicable Disease Exclusion.”

The company wanted to make it clear that liability claims from communicable diseases are not insured.

“Certainly we’re in very unprecedented times,” explained Rob de Pruis, Insurance Bureau of Canada, director of Consumer and Industry Relations, Western.

COVID-19 affected many sectors of the economy and while insurance companies do not usually cover communicable disease, they are not taking any chances with miscommunication about what is in the homeowner’s policy.

“Just to make sure it’s clear that any damages or injuries for people that may get a communicable disease, like COVID, are not covered by your homeowners insurance policy,” de Pruis says. “Communicable diseases traditionally and historically speaking are not covered by residential home insurance policies. What we are starting to see (is) if some of the exclusions are being highlighted in many insurance policies or they’re being brought to the policy holders’ attention.”

CTV News reached out to the Co-operators asking why the notice sent out listed communicable disease as a new exclusion. The company responded in an email stating, "We recently made the decision to specifically add language to our property policies to provide clarity on the existing limitations in our property coverage and greater transparency for our clients."

Homeownerswho put their properties on Airbnb for rent are not covered either. Although Airbnb provides what the company calls Host Protection Insurance, the policy explicitly excludes communicable disease.

If you receive a notification and do not understand it, reach out to your insurance provider. It is always a good reminder to read the wording of your insurance policy carefully, and to reach out to your provider if you have any questions.

In addition, it is important to check your liability limits. Airbnb provides $1 mil in liability insurance but it may not be enough and your regular homeowners policy may not be adequate either.  You may want to consider topping up your policy with a personal umbrella policy. According to the website, UnderwritersCanada.ca, a PUP policy can offer more protections in an increasingly litigious society may even protect you for incidents that occur outside Canada.