What Does Home Insurance NOT Cover? Ontario Exclusions Explained

Co-Author and Reviewer: Michelle Bragg, VP Personal Lines, RIBO-Licensed Broker, BIG | Last Reviewed: August 2026

Home insurance in Ontario does not cover gradual wear and tear, pest or rodent damage, intentional damage, certain natural disasters without specific endorsements, earthquakes, sewer backup (unless added), and vacant home scenarios. Most standard policies also exclude mold, foundation issues from settling, and damage from home-based business activities. Understanding these exclusions helps you avoid denied claims and identify coverage gaps.

When you purchase home insurance, it's easy to assume you're protected from every possible disaster. But the reality is that every home insurance policy in Ontario includes a long list of exclusions — perils and situations that are specifically not covered unless you purchase optional endorsements.

These exclusions exist for a reason. Insurance is designed to protect you from sudden, accidental losses — not predictable maintenance issues or preventable damage. But if you're not aware of what's excluded, you could face a denied claim at the worst possible time.

In this blog, we'll walk you through the most common home insurance exclusions in Ontario, explain what each one means in practice, and show you where optional coverage is available.

This article is for educational purposes only and does not constitute legal, financial, or insurance advice. Home insurance policies vary by insurer, and coverage exclusions depend on your specific policy wording. For personalized guidance on your coverage, speak with a licensed insurance broker. Billyard Insurance Group is regulated by the Financial Services Regulatory Authority of Ontario (FSRA).

Why Do Home Insurance Policies Have Exclusions?

Insurance policies are built around the principle of insurable risk — events that are unpredictable and outside your control. Exclusions exist to:

• Prevent moral hazard: Intentional damage or neglect can't be insured.
• Encourage maintenance: Wear and tear is your responsibility as a homeowner.
• Manage catastrophic risk: Some perils (like earthquakes) require separate pools of coverage.
• Keep premiums affordable: Covering every scenario would make insurance unaffordable for most families.

According to the Insurance Bureau of Canada (IBC), understanding your policy's exclusions is one of the most important steps you can take to avoid claim surprises.

Common Home Insurance Exclusions in Ontario

1. Gradual Deterioration and Wear and Tear

What it means:

Your home insurance policy does not cover damage that happens slowly over time due to age, lack of maintenance, or normal use. This includes:

• Worn-out roofing shingles
• Cracked caulking around windows
• Peeling paint or crumbling mortar
• Rusted plumbing or aging furnaces

Why it's excluded:

Wear and tear is considered preventable through regular maintenance. Insurance is designed for sudden, accidental losses — not predictable decline.

What you can do:

Keep up with routine home maintenance and budget for replacement costs as your home ages. If a covered peril (like a windstorm) damages an aging roof, the insurer may still pay for repairs — but they won't cover damage from simple age or neglect.

2. Pest and Rodent Damage

What it means:

Damage caused by insects, rodents, birds, raccoons, or other animals is almost always excluded. This includes:

• Chewed wiring from mice or squirrels
• Insulation damage from raccoons in the attic
• Termite damage to structural wood
• Bat guano cleanup

Why it's excluded:

Pest infestations are considered preventable through proper home maintenance, sealing entry points, and professional pest control.

What you can do:

Inspect your home regularly for signs of pests. Seal gaps, install chimney caps, and address infestations immediately. If an animal causes sudden and accidental damage — like a raccoon breaking through a roof vent during a storm — you may have coverage, but chronic pest damage is not covered.

For more on how animals can affect your property, read our guide on Home Safety Tips.

3. Mold and Fungus (Unless Sudden and Accidental)

What it means:

Mold damage is excluded unless it results from a covered peril. For example:

• Excluded: Mold from a slow leak you didn't notice
• Covered: Mold that appears after a sudden pipe burst, if you mitigate promptly

Why it's excluded:

Mold often results from neglect, poor ventilation, or gradual moisture buildup — all considered preventable.

What you can do:

Address leaks immediately, maintain proper ventilation in bathrooms and basements, and use dehumidifiers in damp areas. If you discover mold after a covered water loss, document everything and act quickly. Delayed action can void your claim.

For practical tips, check out How to Get Rid of Mold.

4. Sewer Backup (Without Optional Coverage)

What it means:

Most standard home insurance policies in Ontario exclude damage from sewer or drain backups unless you purchase a sewer backup endorsement.

Sewer backup can cause:

• Flooding in basements
• Contaminated water damage
• Costly cleanup and sanitization

Why it's excluded:

Sewer backup is considered a high-risk, high-cost peril in urban areas with aging infrastructure.

What you can do:

Add sewer backup coverage to your policy. This endorsement is inexpensive compared to the potential damage — cleanup costs can easily reach $10,000 or more.

Learn more in our article on Sewer Backup Coverage.

5. Earthquakes

What it means:

Earthquake damage is excluded from all standard home insurance policies in Ontario. This includes:

• Structural damage from seismic activity
• Cracked foundations
• Collapsed walls or chimneys

Why it's excluded:

Earthquakes are considered catastrophic events that require separate risk pools and pricing.

What you can do:

You can purchase earthquake coverage as an optional endorsement. While Ontario is not a high-risk zone like British Columbia, small seismic events do occur. If you live near the Ottawa Valley or other geologically active areas, earthquake coverage may be worth considering.

6. Overland Flooding (Without Optional Coverage)

What it means:

Damage from overland flooding — water that enters your home from outside due to heavy rain, snowmelt, or overflowing rivers — is excluded unless you add overland water coverage.

Why it's excluded:

Overland flooding is a high-frequency, high-severity peril in many parts of Ontario, particularly near rivers and low-lying areas.

What you can do:

Add overland water coverage to your policy. This endorsement has become widely available in Ontario in recent years and is essential if you live in a flood-prone area.

Read more in our guide on Overland Water Coverage.

7. Foundation Cracks and Settling

What it means:

Cracks or damage caused by your home settling over time are excluded. This includes:

• Hairline cracks in basement walls
• Uneven floors from soil movement
• Foundation shifting due to poor soil compaction

Why it's excluded:

Foundation settling is considered a maintenance or construction issue, not an insurable peril.

What you can do:

Monitor your foundation for changes. If cracks appear suddenly after a covered event (like an earthquake with coverage, or a burst pipe undermining the foundation), you may have a claim — but gradual settling is your responsibility.

8. Intentional Damage

What it means:

Any damage you cause on purpose is excluded. This includes:

• Deliberately setting a fire
• Destroying property during a domestic dispute
• Vandalism by you or members of your household

Why it's excluded:

Insurance protects against accidental losses. Intentional acts are fraud and can result in criminal charges.

What you can do:

Never attempt to defraud an insurer. If you're struggling financially, speak with your broker about payment plans or coverage adjustments. Fraud is a crime and will void your entire policy.

9. Vacant or Unoccupied Homes

What it means:

If your home is vacant (unfurnished and unoccupied) for more than 30 consecutive days, your standard policy may deny claims or reduce coverage significantly.

Why it's excluded:

Vacant homes are at higher risk for:

• Vandalism
• Burst pipes
• Theft
• Arson

What you can do:

If you're leaving your home vacant — for a long trip, a job relocation, or while selling — notify your insurer immediately. You may need to purchase vacant home insurance.

Read our full guide on Vacant Home Insurance.

10. Home-Based Business Activities

What it means:

Most standard home insurance policies exclude coverage for business activities conducted from your home. This includes:

• Liability claims from clients visiting your home office
• Damage to business equipment or inventory
• Professional liability (errors and omissions)

Why it's excluded:

Home insurance is designed for personal use. Business activities introduce different risks that require commercial coverage.

What you can do:

If you run a business from home — even part-time — speak with a BIG broker about adding a home-based business endorsement or purchasing a standalone commercial policy.

For more on business insurance, visit our Small Business Insurance resource.

What Makes a Home Insurance Claim Invalid in Ontario?

Even if the peril is covered, your claim can still be denied if:

• You failed to maintain your home: Neglect or lack of reasonable maintenance can void coverage.
• You didn't disclose material facts: Lying on your application (e.g., hiding a prior claim) is fraud.
• You didn't mitigate the damage: After a covered loss, you're required to take reasonable steps to prevent further damage.
• The damage was intentional: Fraud or arson voids your policy.
• Your home was vacant: Most policies exclude claims if your home was vacant for 30+ days without notice.

According to the Financial Services Regulatory Authority of Ontario (FSRA), transparency and policy compliance are critical to a valid claim.

How to Identify Coverage Gaps Before You Need to Claim

The best time to review your home insurance exclusions is before a loss occurs. Here's how:

1. Read your policy wording carefully. Don't rely on assumptions.
2. Ask your broker specific questions. Use the FAQ below as a starting point.
3. Review your coverage annually. Life changes — renovations, home-based businesses, extended trips — can create new gaps.
4. Add endorsements where needed. Sewer backup, overland water, earthquake, and home business endorsements are inexpensive compared to the cost of a denied claim.

For a comprehensive overview of what is covered, read our guide on What Does Home Insurance Cover.

Frequently Asked Questions

Does home insurance cover foundation cracks in Ontario?

No, most home insurance policies exclude foundation cracks caused by settling, soil movement, or age. Coverage may apply if the crack results from a sudden, covered event like an earthquake (if you have earthquake coverage) or a burst pipe that undermines the foundation. Gradual settling is always excluded.

Does home insurance cover mold in Ontario?

Mold is covered only if it results from a sudden, covered peril — like a burst pipe — and you mitigate the damage promptly. Mold from gradual leaks, poor ventilation, or neglect is excluded. Delayed action can void your claim.

Does home insurance cover rodent damage in Ontario?

No. Damage caused by rodents, insects, or other pests is excluded from standard home insurance policies. Infestations are considered preventable through maintenance and pest control. If an animal causes sudden accidental damage during a storm, limited coverage may apply.

What voids a home insurance claim in Ontario?

Claims can be denied if you fail to maintain your home, commit fraud, don't disclose material facts, fail to mitigate damage after a loss, or leave your home vacant for 30+ days without notifying your insurer. Intentional damage always voids coverage.

Is sewer backup covered by home insurance in Ontario?

Not automatically. You must purchase a sewer backup endorsement to add this coverage. Without it, damage from sewer or drain backups is excluded. This endorsement is highly recommended in urban areas with aging infrastructure.

Does home insurance cover earthquake damage in Ontario?

No, earthquake damage is excluded from standard policies. You can add earthquake coverage as an optional endorsement. While Ontario is lower-risk than other provinces, seismic events do occur near the Ottawa Valley and Great Lakes region.

Know Your Exclusions, Protect Your Investment

Your home is likely your largest financial asset. Understanding what your insurance doesn't cover is just as important as knowing what it does. By identifying exclusions, adding the right endorsements, and maintaining your home properly, you can avoid claim denials and protect your family's financial security.

Unsure what your policy actually covers? A BIG broker can walk you through your exclusions, recommend endorsements, and make sure you're not exposed to coverage gaps. Get a personalized home insurance review today.