Liability · Insurance Term
Habitability Exclusion
Definition
A habitability exclusion is a liability policy provision that removes coverage for claims that a rental unit was unfit to live in, such as complaints about mold, pests, broken heat or unsafe conditions. It is most common on apartment and other residential rental policies.
In Plain English
Tenants sometimes sue landlords for living in a unit they say was unsafe or unhealthy. A habitability exclusion tells you the commercial general liability policy will not defend or pay those claims. Some versions are narrow and only remove claims for rent refunds or lease breaches. Others are broad and remove almost any claim tied to the condition of the unit.
These exclusions show up most often on habitational risk policies, where underwriters see repeat suits over repairs. The exact wording matters a great deal. A broad version could, for example, be read to reach an injury caused by a rotted stair, which is the kind of claim most owners expect their liability policy to handle.
Because this is an exclusion, it is easy to miss. It may appear as an endorsement added to the policy rather than in the main form. Read the endorsement list on your policy, not just the summary on a quote.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a tenant in a 40-unit building sues, saying a leaking roof caused mold and illness. If the policy has a broad habitability exclusion, the insurer may decline to defend the suit, and the owner pays the lawyer. Under a narrower version, the injury part of the claim might still be defended.
Why It Matters for Texas Property Owners
Texas Property Code §92.052 requires a residential landlord to make a diligent effort to repair conditions that materially affect an ordinary tenant's physical health or safety, once the tenant gives proper notice and is not behind on rent. Tenant claims built on that duty are exactly what these exclusions target, so Texas apartment owners should know whether their policy carries one.
What to Watch For
- Ask whether any quote for an apartment or rental property includes a habitability exclusion, and get the exact endorsement name.
- Compare how broad the wording is: rent refunds only, or any claim tied to the unit's condition.
- Keep written repair logs and response times, since good maintenance records help with any tenant claim.
- Ask whether an option without the exclusion exists and what it would change in price or terms.
Sources
Last updated October 14, 2026 · Primesure editorial team · How We Write