Built-On Risk: How Insurance Handles Homes With Unsafe Materials

Americans spend roughly 90% of their time inside, where pollutant concentrations are up to five times higher than they are outside.[1] Some contaminants (like cigarette smoke or pesticides) can be avoided. Others (like asbestos and lead) are built into your home’s walls, floors, or insulation. 

Insurance companies expect homeowners to perform routine maintenance and fix issues when they’re spotted.[2] If you don’t take these steps, your insurance company could reject any associated claims. 

Pollutants like lead, asbestos, and formaldehyde fall into this category. It’s typically a homeowner’s job to look for these issues and address them. 

Policies usually don’t cover pollutant removal or mitigation.

Exceptions to this exist. Some pollutants become hazardous due to covered events (like fires or water exposure). In those situations, the damage might be covered. You must fight for payment and prove that it’s absolutely not your fault. 

What Are Unsafe Building Materials? 

Plenty of pollutants exist within the average American household. According to the National Center for Healthy Housing, these are common unsafe building materials:[3] 

What Is It?	Where Is It?	What Harm Can It Cause?
Asbestos	Floor tiles, ceiling tiles, plaster, insulation, adhesives, and roofing	Lung disease
Chromated copper arsenic	Pressure-treated wood	Cancer of the lung, bladder, skin, kidney, prostate, and sinus
Formaldehyde	Pressed wood products, including flooding and siding	Respiratory irritant
Phthalates	Carpet, flooring, wall coverings, ceiling tiles, and waterproof membranes	Endocrine disruption
Polybrominated diphenyl ethers	Insulation and cushions	Liver toxicity, thyroid problems, neurological disorders, and reproductive disorders

This is not a comprehensive list. Your home may have other pollutants that could harm your health, especially if the materials are disturbed through construction, remodeling, or hazards (like fires). 

How Do Unsafe Building Materials & Homeowners Insurance Work Together?

Many people believe that their homeowners insurance policies will help them keep their homes safer. The truth is a little more complex. Here’s what you need to know.

Understanding covered perils and exclusions in your homeowners insurance policy is critical.

What Are Covered Perils? 

Standard homeowners insurance policies use the concept of “covered perils” to help their customers understand the issues that typically end in an approved claim.[4] The disasters typically covered include the following:

• Fire or lightning 
• Hail or wind 
• Explosions 
• Riots 
• Aircraft crashes 
• Vehicle crashes 
• Smoke
• Vandalism 
• Theft 
• Volcanoes 
• Falling objects
• Weight of snow, sleet, or ice 
• Accidental steam or water discharge from pipes or appliances
• Freezing of pipes or appliances 
• Artificially generated electrical current 

If your unsafe building materials are exposed or damaged through one of these perils, your claim could be approved by the insurance company. 

What Are Specific Exclusions?

Companies use the concept of “exclusions” to help their customers understand what absolutely is not covered by their plans. Insurance companies often put contaminants in this category. 

For example, American Family Insurance specifically excludes asbestos removal in their policies.[5] The company says these materials don’t pose immediate threats and don’t need to be removed when spotted. They encourage homeowners to inspect their homes carefully, especially before they buy them.

Safeco also specifically excludes asbestos. The company also excludes “any other irritant or contaminant” from their policies.[6] This expansive clause means the company won’t help you remove hazards you find in your home. It’s considered part of your responsibility as a homeowner. 

Some lawmakers, including one in New York State, don’t believe that these exclusions are fair.[7] They hope to encourage insurance companies to cover the removal of hazardous projects in standard policies. Until the laws change, most companies will exclude them. 

Parsing Your Policy: What Is Covered?

The answer to most coverage questions is: It depends. If you have hazardous items within your home your policy might help to fix the damage, but it might not. 

Dig deep into what’s prompting you to remove the contaminant. Did you discover it because of a covered event, like a fire? If so, a claim could be approved by your insurance company, and you could use it to remove the hazards. 

Claims for hazards are typically denied if the issue was discovered due to a renovation, inspection, or routine maintenance. You can’t tie the removal to a covered event, so the company likely won’t help you. 

Should You File a Claim?

If you’ve discovered hazards as part of a covered event, consider filing a claim. 

To file a claim for a covered event, take the following steps:

1. Contact your insurance agent and explain that you want to file a claim. 
2. Take photos and videos of all the damage included in your claim. 
3. Meet with an insurance adjuster and allow an in-person inspection of the damage. 
4. Negotiate with the insurance company for the proper payout. 

Your insurance costs can go up after filing a claim. Insurance companies share claim data, so even shopping for another plan may not help you save money in the future. 

Can Your Policy Get Canceled for Unsafe Materials? 

Few homeowners insurance companies inspect homes and check for hazards. However, most organizations know that contaminants are more common in older homes than in newer versions. 

Some insurance companies won’t write policies for homes built in the 1980s and 1990s. One family in Florida, for example, couldn’t get a policy on their home built in 1984, as their company said they won’t write policies for homes built before 2014.[8] 

If your insurance company won’t write a new policy, you won’t be surprised by the decision. You’ll get a notification within one to three months of your renewal date.[9] Use this time to find a new insurance partner that will write a policy for your home. If you can’t find a partner, you do have options, but they can be expensive. 

Homeowner Responsibilities for Unsafe Materials 

Since your insurance company won’t help with routine maintenance and removal, it’s your job to keep your home as safe as possible. 

Invest in routine inspections. A qualified contractor can walk through your home and give you a detailed to-do list of items you should fix in your home. 

If you embark on a removal project, hire a qualified contractor who has experience with these types of issues.

Contact your insurance company both before and after a major home improvement project.[10] Removing risks might help to lower your premiums. However, some projects can also increase the value of your home, so you may need more coverage to protect you in case of a major issue like a fire. 

You Can Handle Home Hazards

While most homes contain at least a few hazards, it’s important to know what is (and isn’t) inside your home. Work with an inspector you trust, and do your part to mitigate risks when you can. 

Stay in close contact with your insurance company. Review your policy regularly, so you know what is and is not covered. This can prevent surprises down the road when you are already under a lot of stress from an unexpected event. And don’t be afraid to ask for more coverage, so you’re protected if the worst happens.