What does home insurance cover?
If you're wondering, what does home insurance cover? Realize that it doesn't cover everything. Home insurance offers coverage for your home, its contents, and other structures on your property but does not pay for damages associated with normal wear and tear, animals, floods, or earthquakes.
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Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
UPDATED: Feb 28, 2024
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Feb 28, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance providers please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Home insurance may seem confusing, but homeowners insurance coverage is not difficult to understand. Buying home insurance helps homeowners if their house or property is damaged. With a home insurance policy, your home, its contents, and other structures on your property will be repaired or replaced after a covered event.
When searching for home insurance coverage, you may be wondering — what does home insurance cover? You should consider both your dwelling and surrounding property when deciding whether you need additional coverage options. For instance, some homeowners purchase flood coverage since flood damage is not covered under a typical home insurance policy.
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Once you know what you want in your home insurance policy, you should find and compare quotes from several insurance companies. Doing so will help you determine which one offers cheap homeowners insurance coverage in your area.
What Home Insurance Covers
A standard homeowners insurance policy includes six types of coverage including:
- Dwelling coverage
- Coverage for other structures
- Personal property insurance
- Loss of use coverage
- Personal liability insurance
- Medical payments
The six coverages listed above help with many things about being a homeowner.
Dwelling Coverage
Dwelling insurance covers your home and any structures attached to your home, like a deck or a porch. With dwelling coverage, your insurance provider will pay enough to rebuild your home.
Dwelling coverage typically works in the following scenarios:
- Fire
- Lightning
- Windstorms
- Hail
- Explosions
- Theft and vandalism
- Damage from ice, snow, and sleet
- Sudden damage from a power surge
- Volcanic eruptions
- Falling debris
- Water overflow or discharge from plumbing, air conditioning, and appliances
- Riots
- Damage from aircraft
- Damage caused by vehicles
For example, home insurance covers smoke damage in most scenarios, but you can check your policy details if you’re unsure about your coverage.
Coverage for Other Structures
Homeowners insurance covers detached structures on your property. These can include a shed, a detached garage, and even fences. Home insurance policies vary in terms of the coverage they offer for this insurance, but many providers offer coverage at around 10% of what the home is worth.
Personal Property Insurance
With personal property insurance, your homeowners insurance policy will pay to repair or replace damaged or stolen belongings. Most policies offer personal property insurance worth anywhere from 50% to 70% of the home’s value.
Loss of Use Coverage
With loss of use coverage, your insurance provider will pay for your temporary living expenses if you vacate your home during repairs following a covered event. Most providers offer loss of use coverage worth around 20% of the value of your home and property.
Personal Liability Insurance
The personal liability portion of your home insurance policy protects you if you unintentionally injure someone or damage someone else’s property or because of neglect. With personal liability coverage, you can choose an amount of coverage anywhere from $100,000 to $500,000. The amount you choose for personal liability can impact the average cost of home insurance.
Medical Payments
Medical payments will cover medical bills and treatments associated with a covered event. For example, if someone is injured on your property, medical payments will cover the costs associated with that individual’s recovery. Medical payments coverage is similar to personal liability coverage in that homeowners can choose their amount of coverage.
Read more: What is the average cost of homeowners insurance?
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What Home Insurance Doesn’t Cover
While homeowners policies provide coverage for many scenarios, there are plenty of things a standard policy does not cover. Some of the things not covered under a typical home insurance policy include:
- Earthquakes
- Sinkholes
- Floods
- Sump pump overflow
- Termites
- Insect damage
- Bird or rodent damage
- Rust, rot, or mold
- Wear and tear
- Damage from war or nuclear hazards
- Identity theft
Certain exclusions listed above may not apply if you’ve added coverage to your home insurance policy to cover them. For example, you can purchase flood insurance in addition to your standard home insurance policy to ensure your home is covered if there’s ever a flood in your area.
If you’re curious whether home insurance covers roof leaks and other issues, the answer depends on how the damage occurred. If the damage that caused a roof leak was sudden, like a fallen tree, your home insurance policy would cover repairs. However, if the damage was caused by general wear and tear, you may have to pay for repairs yourself.
In addition, most home insurance policies offer limited coverage for the following:
- Boats, jet skis, and other watercraft
- Valuable property
- Firearms
- Jewelry
Read more: Does Auto Insurance cover rodent damage?
If you have a home insurance policy offering actual cash value (ACV), you may find that the replacement cost of certain items in your home is higher than what your policy pays if those items get damaged. If possible, buy home insurance that offers replacement cost coverage rather than ACV coverage. The best policy will help you stay protected in virtually all scenarios.
How to Choose the Best Home Insurance Policy
You need to know what home insurance covers and the type of coverage you want for your home before you shop for the best home insurance policy. If you want a standard policy, you may have more options, and your rates will be cheaper. Still, many homeowners need added protection with additional coverages.
Once you know what you need, you can find and compare home insurance quotes online. You can also see what smaller, regional insurance providers have to offer. For example, Magnum is an A+ Better Business Bureau rated company providing insurance for residents of Illinois and Indiana. You can see our Magnum homeowners insurance review for details.
Comparing quotes from at least three insurance providers will help you save money on coverage without sacrificing the type of insurance you have for your home. In addition, when you compare quotes, you can learn which providers offer the most affordable home insurance near you.
Frequently Asked Questions
What is home insurance?
Home insurance is a type of property insurance that provides financial protection for homeowners against certain risks and damages to their property. It typically includes coverage for the physical structure of the home, personal belongings, and liability protection.
What does home insurance cover?
Home insurance covers various aspects, including:
- Dwelling coverage: This covers the physical structure of your home, such as the walls, roof, foundation, and built-in appliances, against damage caused by covered perils, such as fire, windstorm, or vandalism.
- Personal property coverage: This covers your personal belongings, such as furniture, electronics, clothing, and other items, against covered perils, both inside and outside your home. It may also cover belongings when you’re traveling.
- Liability coverage: This provides protection if someone is injured on your property and holds you responsible. It can help cover legal expenses and medical bills if you’re found liable.
- Additional living expenses: If your home becomes uninhabitable due to a covered event, home insurance may cover temporary living expenses, such as hotel bills or rent.
- Other structures coverage: This extends coverage to structures on your property that are not attached to your home, such as a detached garage, shed, or fence.
What is normally covered by homeowers insurance?
The specific perils covered vary depending on the insurance policy, but common perils include fire, lightning, windstorm, hail, theft, vandalism, and certain types of water damage. It’s important to review your policy to understand the covered perils and any exclusions.
Are there any exclusions or limitations to home insurance coverage?
Yes, home insurance policies often have exclusions and limitations. It’s crucial to carefully review your policy to understand what is and isn’t covered.
What are two things not covered in homeowners insurance?
The most common home insurance exclusions are flood and earthquake damage. In some states, additional flood insurance or earthquake insurance may be required.
Which area is not protected by most homeowners insurance policies?
Along with floods and earthquakes, home insurance will not protect against normal wear and tear or identity theft. Coverage also won’t apply to any home business space or supplies.
Are there optional coverages available for home insurance?
Yes, there are optional coverages that you can add to your home insurance policy for additional protection. These may include:
- Scheduled personal property: This allows you to insure specific high-value items, such as jewelry, art, or collectibles, which may have coverage limits under the standard policy.
- Umbrella liability insurance: This provides extra liability coverage beyond the limits of your standard policy, offering increased protection in case of a lawsuit.
- Home business coverage: If you operate a business from your home, you may need additional coverage to protect your business assets and liability.
- Sewer backup coverage: This protects against damage caused by the backup or overflow of sewers or drains.
How does a home insurance claim work?
You will initiate the claims process by contacting your agent or filling out an online form through your insurance account. An adjuster will reach out to inspect the damage and offer you a settlement, which you can negotiate based on the damage and terms of your home insurance policy.
Compare Insurance Providers Rates to Save Up to 75%
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Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.