- Standard homeowners insurance usually covers your home, other structures, belongings, temporary living expenses, liability and guest medical payments as a result of a covered loss.
- It can help after covered losses like storm damage, theft or injuries on your property.
- Your payout may depend on whether your policy includes actual cash value or replacement cost.
- Common exclusions include floods, earthquakes, water backup, and normal wear and tear.
What Does Homeowners Insurance Cover?
Homeowners insurance can do a lot more than protect the four walls of your house. A standard policy typically includes protection for your home, other structures on your property, your belongings, certain temporary living expenses, liability claims and guest medical payments. Just as important, it also has exclusions and limits you should understand before you need to file a claim.
Key Takeaways
Below, we’ll walk through what home insurance covers under a standard policy and what it doesn’t in many common situations.
Quick takeaway: A standard homeowners policy usually protects your home and belongings against certain covered losses, but it doesn’t cover every kind of damage. Floods, earthquakes, wear and tear, and some backup-related water losses often require separate protection or aren’t covered at all.
What is a homeowners insurance policy?
In general, “homeowners insurance” can refer to several kinds of property insurance, including traditional home policies, condo policies, renters policies and dwelling policies. In this article, we’re focusing specifically on the policy and coverages for a stand-alone house that you own. While homeowners insurance is usually required if you have a mortgage, it can still be an important safeguard even if you own your home outright.
A home insurance policy provides a financial safety net that can help you recover after a covered loss. Depending on the situation, it may help pay for home repairs, replace damaged belongings or cover temporary living expenses if your home becomes unlivable from a covered loss for a period of time.
Let’s take a closer look at what home insurance covers under a standard policy.
What is covered by home insurance?
A standard homeowners insurance policy is usually made up of six core coverages.
| Coverage type | What it generally helps cover | Example |
|---|---|---|
| Dwelling coverage | The main structure of your home and attached structures | A windstorm damages your roof |
| Other structures coverage | Detached structures on your property | A shed or fence is damaged by a fallen tree |
| Personal property coverage | Your belongings, such as furniture, clothing and electronics | A theft results in stolen electronics |
| Loss of use | Additional living costs if you can’t stay in your home after a covered loss | You stay in a hotel during repairs after a fire |
| Personal liability coverage | Covered injuries or property damage you may cause to others | A guest sues after being injured on your property |
| Medical payments coverage | Minor guest medical expenses, regardless of fault | A visitor slips on your property and needs urgent care |
1. Dwelling coverage
Say a tree falls on your house, damages your roof and crashes into your living room. This type of incident would fall under dwelling coverage, which helps protect the main structure of your home and attached structures, such as an attached garage. If the damage is caused by a covered loss, dwelling coverage may help pay to repair the damage.
2. Other structures coverage
Structures on your property that aren’t attached to your main home – like pergolas, gazebos, sheds, detached garages and fences – are generally covered under the “other structures” section of your policy.
3. Personal property coverage
Personal property coverage helps protect items like your furniture, electronics, clothing and collectibles. A general rule is to think of personal property as the items you’d take with you if you moved.
So, if a burglar breaks into your home and enters it to steal your TV and laptop, personal property coverage may help replace the stolen items, while replacing the broken window or door would typically fall under dwelling coverage.
4. Loss of use
If a serious covered loss damages your home to the point that it’s not livable, loss of use coverage can help. While your home is being repaired or rebuilt, this coverage may reimburse additional living expenses you incur above your normal budget. For example, if a tornado rips off your roof and you need to stay in a hotel while repairs are made, loss of use coverage may help with the increased cost of living during that time.
5. Personal liability coverage
Accidents happen. Personal liability coverage may help if you or a member of your household accidentally causes bodily injury or property damage to someone else. This coverage may help pay for the damaged property, the other person’s injuries or covered legal expenses.
For example, say a neighbor stops by your home and your dog unexpectedly bites him. If you’re found legally responsible and damages are awarded, your liability coverage may help cover the loss up to your policy’s liability limit.
As part of this coverage, your insurance company may also defend you in court and cover related legal costs for a covered claim. Many times, however, the insurer may resolve the claim without the need for litigation.
6. Medical payments coverage
For minor injuries, such as a guest slipping and falling on your property, medical payments coverage may help pay for their medical expenses up to your coverage limit, regardless of fault.
How claim settlement can affect what home insurance covers
Your policy may include either actual cash value or replacement cost coverage for your home, other structures or personal belongings. Actual cash value pays the depreciated value of damaged or stolen property, while replacement cost pays to replace the item with a new one of like kind and quality.
| Settlement type | How it generally works | What it can mean for you |
|---|---|---|
| Actual cash value | Pays the item’s value after depreciation | Lower payout, but sometimes lower premium |
| Replacement cost | Pays what it costs to replace the item today, without depreciation | Higher payout potential after a covered loss |
If you want a deeper explanation, read more about actual cash value and replacement cost.
Important: There are limits on how much your insurer may cover for certain categories of property, such as jewelry, furs or fine art. Depending on your policy and insurer, you may be able to add an endorsement or scheduled coverage for more protection.
What does home insurance not cover?
Home insurance provides essential protection, but it doesn’t cover everything. These are some of the most common exclusions in a standard policy:
| Common exclusion | What to consider |
|---|---|
| Wear and tear or maintenance issues | Routine maintenance is part of homeownership and insurance is designed for sudden, accidental losses rather than ongoing upkeep |
| Flood damage | Separate flood insurance may be needed |
| Earthquake damage | Separate earthquake coverage or an endorsement may be needed |
| Water backup or sump pump failure | Water backup coverage may help fill the gap |
Damage due to wear and tear: Home insurance isn’t intended to cover the normal maintenance involved in owning a home. Damage to your home or property caused by normal wear and tear is generally excluded. If appliances or home systems reach the end of their lifespan, replacement is typically your responsibility.
Some disasters: Some natural disasters, such as floods and earthquakes, aren’t covered under a standard homeowners policy. Instead, you may need a separate policy or endorsement, such as flood insurance or earthquake coverage.
Water backup and sump pump failures: Unless you purchase a separate endorsement specifically for water backup or sump pump failures, damage related to these issues is often excluded from standard insurance coverage.
Worth considering: If you’ve made upgrades to your home, added valuable property or live in an area with elevated flood or earthquake risk, it may be a good time to review whether standard coverage still fits your needs.
Additional home insurance coverage options worth knowing about
A standard policy is a strong starting point, but some homeowners want broader protection than the base policy provides. Depending on your situation, it may be worth reviewing additional coverages and endorsements.
- Flood insurance for flood-related water damage
- Home insurance for a broader view of standard and optional protections
- Personalized insurance for customizable coverage options
- Umbrella policies for additional liability protection
How to review whether your homeowners coverage still fits
Your home is likely your biggest asset, and your homeowners insurance policy plays a pivotal role in protecting it. But it should also be treated as a living document. As your needs change – for example, as you renovate your home, add detached structures or accumulate more valuables – it’s smart to re-evaluate your coverage and review your policy to make sure your limits and options still fit.
If you could use help determining your coverage needs, get in touch with an insurance representative. They can review your policy, compare it to the risks your property may face and help you adjust your coverage accordingly.
Want more info? You may also want to learn about the amount of insurance you should carry and choosing the right deductible.
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FAQs about what homeowners insurance includes
Homeowners insurance may help cover your home, certain detached structures, personal belongings, additional living expenses and liability after a covered loss. Coverage details vary by policy, so it’s important to review your own documents for exact limits and exclusions.
Floods, earthquakes, wear and tear, maintenance-related damage and certain water backup losses unless separate coverage or endorsements are added.
Generally, no. Separate flood insurance or earthquake coverage may be needed, depending on where you live and the risks to your home.
Review your policy after renovations, major purchases or lifestyle changes. It can also help to compare your current limits with your home’s rebuilding cost, your belongings and any added liability risks.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
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