Which peril is most commonly excluded from standard homeowners insurance policies?

Homeowners insurance policies are designed to cover a range of perils that may cause damage to a home and its contents. However, certain risks are generally excluded from standard coverage to help keep policy premiums manageable. Earthquake damage is one of the most commonly excluded perils from these policies.

The rationale for this exclusion lies in the nature and unpredictability of earthquakes. Major earthquakes can cause extensive and costly damage, significantly impacting a large area, which raises the risk and potential payout for insurance companies. As a result, insurers often exclude this peril from standard homeowners policies while offering the option to purchase separate earthquake insurance for those who live in high-risk areas.

In contrast, perils such as theft, fire damage, and windstorm damage are typically covered by standard homeowners policies, as these events are more common and manageable through specific underwriting processes. Thus, while homeowners insurance provides a broad safety net, earthquake damage is distinctly recognized as a significant risk that requires additional coverage beyond the standard policy.