When your home suffers damage, you expect your home damage insurance to cover the loss. But not every type of damage gets paid out. Many homeowners in New York, New Jersey, and Pennsylvania find out too late that certain damages fall outside their policy. Knowing what is not recoverable can save you from a painful surprise during a claim.
Keep reading to learn which damages are usually left out of a payout, and why.
At a glance
- Punitive damages are almost never recoverable in a standard insurance claim.
- Attorney’s fees are usually not covered unless a law or your policy says otherwise.
- Emotional distress is not treated as a covered loss under most contracts.
- Consequential damages are often disputed and only recoverable in narrow cases.
Which damages are not recoverable under home damage insurance?
Several types of damages are commonly excluded from insurance payouts. Here are the main ones homeowners should know about.
Punitive damages. These are meant to punish an insurer for bad behavior, not to repair your home. Courts in New York generally do not allow punitive damages for a routine breach of an insurance contract. They are only awarded in rare cases involving serious misconduct aimed at the public.
Attorney’s fees. If you hire a lawyer to fight your claim, don’t expect your insurer to pay for it. Attorney’s fees are usually not recoverable unless a specific law, a court rule, or your policy allows it.
Emotional distress damages. Dealing with home damage is stressful. But stress itself is not a covered loss. Courts do not treat emotional distress as part of a contract claim, so insurers are not required to pay for it.
Consequential damages. These are losses that happen as a side effect of the original damage, like lost income or extra living costs. These are often disputed. They may be recoverable only if they were foreseeable and clearly tied to the insurer’s failure to pay.
Why this matters for homeowners
If you already received full payment under your policy, you generally cannot later claim more money, even if your insurer recovers extra funds through a legal action against another party. Courts have ruled that once you are made whole under your policy, you are not entitled to additional proceeds.
This is also why reading your policy closely matters. Some damages, like the stress of a denied claim or the cost of hiring legal help, will not be part of your payout