What Does Home Insurance Cover?
Home insurance covers your home, belongings, liability, and living expenses after covered losses — but it doesn’t cover every type of damage.
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Written bySarah Archambault
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Sarah ArchambaultInsurance Writer, Editor
Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Edited byBecky Helzer
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Becky HelzerEditor
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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Reviewed byJohn Leach
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John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John is Insurify’s Chief Copy Editor, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.
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Table of contents
Home insurance protects you financially if a fire, hailstorm, vandalism, or other covered event damages your home or belongings. A home insurance policy also includes liability protection and reimbursement for temporary living expenses during covered home repairs.[1]
Here’s what to know about home insurance, including what a standard policy covers and how to choose the right coverage amount.
What home insurance is designed to cover
Home insurance provides financial protection after a sudden, accidental loss. A home insurance policy includes several types of coverage, including dwelling coverage, other structures coverage, personal property coverage, and liability coverage.[2]
Coverage and limits differ among policies, but a standard home insurance policy, also known as HO-3 insurance, typically includes the following coverage types.
Dwelling coverage
Dwelling coverage pays to repair or rebuild your home after a covered peril, such as fire, lightning, hail, vandalism, or a windstorm. This coverage generally covers your home’s walls, roof, floors, and built-in systems, like heating and plumbing.
Your policy limits should be high enough to cover the cost of rebuilding your home from the ground up, including construction costs. Keep in mind that replacement cost differs from your home’s market value, which includes both the house and the land. When you’re rebuilding your home, you’ll have to construct it in accordance with local building codes.
Other structures coverage
Other structures coverage protects fences, decks, sheds, gazebos, detached garages, and other features on the property that aren’t attached to your home. Like dwelling coverage, it pays to repair or replace these items after a covered loss. Coverage limits are typically 10% of your dwelling coverage, but this may vary among insurance companies.
Although a separate part of your home insurance policy, other structures coverage protects detached features of your home from the same perils as your dwelling coverage. This means if your home is protected against hail and windstorms, your fence, deck, and detached structures are also covered.
Personal property coverage
Personal property coverage protects your belongings from covered perils such as fire, theft, and vandalism. It covers items inside your home, including furniture and clothes, and may extend to certain belongings away from home, such as a bicycle or laptop, although a deductible typically applies.
When you make a claim, your insurance pays to repair or replace your belongings up to your policy’s limits. Most policies have separate payout caps for high-value items, like jewelry and electronics. If you need more coverage, you can increase your policy limits or buy a separate policy.
Personal property coverage usually reimburses you for the actual cash value of your belongings, or their value after depreciation. If you want coverage for the full replacement cost, you can pay a higher premium to add replacement cost coverage to your policy.
Personal liability coverage
Personal liability coverage offers financial protection if you, a family member, or your pet causes bodily injury or property damage to others. It helps cover legal expenses, medical bills, settlements, and court-ordered judgments.[3]
For example, if a passerby slips on your icy driveway, your liability coverage may pay for their medical bills and your legal fees if they sue you. It also covers incidents away from home, such as your dog biting someone on a walk or your child damaging a neighbor’s lawn.
To ensure you have enough coverage, consider the value of your assets. You can often increase your policy limits, and many insurers offer umbrella liability policies for added protection.
Medical payments coverage
Medical payments coverage helps pay for medical expenses if someone gets injured on your property. It offers quick reimbursement for guest injuries, regardless of fault, such as if a visitor slips on a rug and breaks an arm.
Coverage limits tend to be low, and it’s intended to cover minor injuries. It’s not a substitute for liability coverage, though it adds an extra layer of financial protection and helps you avoid potential lawsuits.
Medical payments coverage pays for an injured guest’s medical treatment, ambulance fees, and hospital bills up to your policy’s limits.
Loss of use (additional living expenses) coverage
Loss of use coverage pays for temporary living expenses if your home is damaged by a covered loss and is uninhabitable during repairs or reconstruction. Also called additional living expenses coverage, loss of use pays for hotel stays, meals, transportation, laundry services, and similar costs. Some policies also cover pet expenses while you’re displaced.
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How home insurance coverage works in a claim
If a tree branch breaks and falls through your roof during a windstorm, your home insurance will likely cover the cost to repair the roof, remove the tree, and replace any personal belongings damaged inside.
To get the process started, you need to file a home insurance claim. The exact claims process varies by insurer but typically involves the following steps:[4]
Document the damage
Before cleaning up or making temporary repairs, it’s important to take photos of the damage to send to your insurer. Gather receipts showing the cost of damaged items, and file a police report if the damage is due to theft or vandalism.
File the claim
Once your home is safe, contact your insurance company to file a claim. You can typically file a claim over the phone, through the insurer’s mobile app, or online. File any paperwork your insurer requests promptly, including photos of the damage, proof-of-loss forms, and receipts for damaged or missing property. Preparing a home inventory before you need it can help document your belongings and keep track of receipts.
Get contractor estimates
After an insurance adjuster comes to your property to assess damage and determine potential repair costs, your insurance company estimates the cost of repairs and how much to pay out on the claim. You get to choose which contractor to hire, but comparing several estimates can help you find the best price.
Receive your settlement
Your insurance company will give you a settlement offer. This is the amount the company agrees to pay for repairs, minus your deductible. If you accept the offer, the money usually arrives in two checks so you can start work right away. If you’re not satisfied with the offer, talk with the claims manager, consult an attorney, or contact your state’s insurance department.
What perils home insurance typically covers
In home insurance, covered perils are the events your policy covers, also known as named perils.
Named perils typically include:
Fire: Fire, explosion, or smoke damage
Windstorms: Hurricanes, tropical storms, tornadoes, and strong winds
Theft and vandalism: Theft, vandalism, riots, or civil commotion
Snow, ice, and hail: Hail damage or the weight of snow, ice, or sleet
Accidental water damage: Certain types of plumbing, heating, or air-conditioning accidents
Not every home insurance policy covers all the common named perils. For instance, some policies may have pre-selected coverages with specific named perils. This means if the policy doesn’t list the peril, it’s not covered. In some cases, you may be able to choose which perils your policy includes.
Good to know
For more comprehensive protection, you can also buy an open-peril policy. This covers any event the policy doesn’t specifically exclude.
What home insurance doesn’t cover
Home insurance provides comprehensive coverage against many risks, but it doesn’t cover everything. Policies vary widely, so check your policy documents closely to understand what’s covered.
Some insurers offer endorsements or separate policies to cover commonly excluded perils, such as flooding, mold, or earthquakes.
Here’s a closer look at the perils standard homeowners insurance policies typically don’t cover:
Floods: Damage from floods, sewer backups, and other types of gradual water damage typically isn’t covered.
Mold: Standard home insurance policies typically don’t cover mold damage.
Earthquakes: Damage from earthquakes or other earth movement, such as landslides or sinkholes, isn’t typically covered.
Wear and tear: Damage from gradual deterioration or normal wear and tear isn’t covered.
Pest damage: Damage caused by insects, rodents, birds, or other pests isn’t typically covered.
Neglect or maintenance issues: Damage resulting from failure to maintain your property, structures, or home systems isn’t covered.
How coverage can vary by homeowners insurance policy type
Home insurance isn’t a one-size-fits-all solution. Coverage can vary widely based on policy type and individual homeowner needs, such as whether you need add-on coverage for valuables or a mold endorsement.
Many types of homeowner policies are available, but HO-3 insurance is among the most common. An HO-3 policy covers perils not listed as exclusions and provides replacement cost value coverage for your house and actual cash value coverage for your belongings. Many mortgage lenders require homeowners to carry an HO-3 policy at a minimum.
Other types of homeowners insurance include HO-1 and HO-5 policies. HO-1 insurance is considered bare-bones coverage and isn’t available in most states anymore. HO-5 insurance is the most comprehensive type of homeowners insurance, covering both your house and belongings at replacement cost value.[5]
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How to choose the right homeowners insurance coverage
Consider the following factors to help you choose the right homeowners insurance coverage:
Location: Weather patterns, climate, crime rates, and other risks in your region can influence the type of policy you choose to buy.
Home value: You can figure out your home’s replacement cost by multiplying its square footage by the average cost per square foot to rebuild a similar house in your area.
Personal property: Home insurance limits coverage for high-value items, so don’t overlook areas where you may need additional protection, such as a tool collection, lots of sports equipment, expensive electronics, or artwork and collectibles.
Risk tolerance: Consider how much financial risk you’re willing to bear if your home sustains significant damage. Choosing a cheaper policy can save you money now, but it may have less coverage and more exclusions. You may also want higher liability limits if your assets exceed your coverage limits.
Before buying a policy, be sure to compare insurance quotes from at least three companies. Look carefully at premiums, deductibles, discounts, and industry reputation to ensure you choose the best home insurance company for your needs.
What home insurance covers FAQs
Home insurance can help protect your home against perils like fire, windstorms, and theft. These answers to frequently asked questions can help you learn more about what home insurance covers and how it works.
No. Homeowners insurance isn’t required by law. But if you finance your home, your mortgage lender will require you to carry a policy with a specific amount of coverage to protect its interest.
It depends. Homeowners insurance covers your roof, but only for damage caused by events included in your policy. For example, it’ll likely cover repairs if a tree falls on your roof during a hurricane. But if your roof needs to be replaced due to age or normal wear and tear, your insurance won’t cover it.
Yes. Many home insurance policies cover your personal items outside the home against theft. For example, if you take your laptop to a coffee shop and it gets stolen, you may be able to file a claim to help pay for a new computer. Keep in mind that your deductible still applies.
It depends. Standard home insurance policies typically don’t cover damage from mold or the cost to remove mold from your home unless the mold results from a covered peril (like a burst pipe). But you may be able to buy an endorsement that helps cover mold remediation.
No. Homeowners insurance doesn’t cover appliance breakdowns since policies typically exclude wear and tear, maintenance issues, and neglect. But if an appliance is damaged by a covered peril, such as a falling tree or a fire, your insurance may cover the cost to repair or replace it.
It depends. Homeowners insurance typically excludes water damage from floods or sewer backups. But sudden and unexpected water damage — such as from a broken pipe or overflowing toilet — may be covered. If flooding is a concern, you can usually purchase a separate flood insurance policy.
Yes. Home insurance generally covers accidental fire damage. Your policy can help pay to repair or replace your home’s structure and personal belongings after a fire and may also offer liability protection if the fire damages your neighbor’s home.
Methodology
Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.
Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:
Default Coverage Assumptions
- Dwelling coverage: $300,000
- Deductible: $1,000
- Personal property limit: $25,000
- Liability limit: $300,000
Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.
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Sources
- Insurance Information Institute. "What is homeowners insurance?."
- Insurance Information Institute. "Homeowners Insurance Basics."
- Insurance Information Institute. "What is covered by standard homeowners insurance?."
- National Association of Insurance Commissioners. "What You Need to Know When Filing a Homeowners Claim."
- National Association of Insurance Commissioners. "A Shopping Tool for Homeowners Insurance."
)
Sarah ArchambaultInsurance Writer, Editor
Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
Featured in
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
Becky HelzerEditor
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John is Insurify’s Chief Copy Editor, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.
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