What type of damage is generally excluded from Dwelling Policies?

Dwelling Policies typically exclude certain types of damage from coverage, and earthquake damage is one of the primary exclusions. This is due to the fact that earthquakes can cause widespread destruction that often exceeds the financial capabilities of many insurance companies to cover within standard policies. As a result, insurers usually offer separate earthquake insurance policies to cover this specific risk, acknowledging the unique and potentially catastrophic nature of earthquake-related damages.

In contrast, other types of damage listed—such as water damage from appliances—may be covered under specific circumstances or endorsements. Theft of personal items is generally included in coverage, especially in more comprehensive dwelling policies. Fire damage, being one of the most common perils, is typically covered by Dwelling Policies, as they are designed to protect against the risks associated with fire incidents. Therefore, earthquake damage stands out as a significant exclusion due to its potential for high severity and the insurance industry's approach to managing such risks.