Homeowners insurance is one of the most important types of insurance you can have if you own a home. It protects your property, your belongings, and even you personally from a wide range of unexpected events. Whether it’s a fire, a storm, theft, or someone getting injured on your property, homeowners insurance can offer financial support when you need it most.
This article will explain what’s typically covered under homeowners insurance in the United States, using straightforward language that’s easy to understand. If you’re a homeowner or planning to become one, this guide will help you understand what protection a standard homeowners policy offers and where you might need additional coverage.
1. Dwelling Coverage
Dwelling coverage is the core part of any homeowners insurance policy. It protects the physical structure of your home—meaning the walls, roof, floors, built-in appliances, and attached structures like a garage or porch. If your home is damaged or destroyed by a covered event (known as a “peril”), dwelling coverage pays for repairs or rebuilding.
Common covered perils include:
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Fire and smoke
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Lightning strikes
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Windstorms and hail
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Explosions
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Theft or vandalism
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Damage from vehicles or aircraft
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Falling objects
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Weight of snow or ice
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Certain types of water damage (like from a burst pipe)
Dwelling coverage is especially important because it helps you rebuild your home if the damage is severe or total. Most policies require you to insure your home for at least 80% of its replacement cost in order to get full compensation.
2. Other Structures Coverage
In addition to your main house, homeowners insurance usually covers other structures on your property. This includes things like:
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Detached garages
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Fences
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Tool sheds
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Guest houses
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Driveways and walkways
This coverage is typically a percentage of your dwelling coverage—often 10%. So, if your home is insured for $300,000, your policy might include $30,000 of coverage for other structures. If one of these structures is damaged by a covered peril, your insurance can help pay to fix or replace it.
3. Personal Property Coverage
Personal property coverage helps protect your belongings inside the home. This includes furniture, clothing, electronics, appliances, and personal items like books, jewelry, and tools.
This part of your policy applies whether the items are stolen, damaged by a fire, or destroyed by another covered event. For example:
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If someone breaks into your home and steals your TV, personal property coverage pays to replace it.
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If a fire damages your furniture and clothes, this coverage helps you replace them.
Some policies also protect your belongings even when they’re outside your home, like if your laptop is stolen from your car or a suitcase is lost during travel.
However, there are limits for high-value items such as jewelry, collectibles, or expensive art. If you have these kinds of items, you may need to buy additional coverage, sometimes called a rider or scheduled personal property endorsement.
4. Loss of Use (Additional Living Expenses)
If your home is damaged so badly that you can’t live in it while it’s being repaired or rebuilt, loss of use coverage (also called “additional living expenses”) helps you cover the cost of temporary housing and other extra expenses.
For example, if a fire makes your home uninhabitable, your insurance might pay for:
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Hotel or rental home stays
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Temporary food expenses
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Extra transportation or storage costs
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Laundry services
This coverage helps you maintain your standard of living during the time you’re displaced. The amount covered is typically a percentage of your dwelling coverage—often around 20%.
5. Personal Liability Coverage
Personal liability coverage protects you if someone is injured or their property is damaged and you’re found legally responsible. It helps cover legal costs, settlements, and court judgments up to the policy’s limit.
Here are some examples of what liability insurance might cover:
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A guest trips on your steps and breaks an arm
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Your dog bites someone
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A tree in your yard falls and damages your neighbor’s roof
This coverage usually starts at $100,000, but many homeowners choose higher limits for more protection. It can also include coverage for accidents that happen off your property, depending on the situation.
6. Medical Payments to Others
Medical payments coverage is designed to cover small medical expenses for guests who are injured on your property, regardless of who was at fault. This is different from liability insurance, which only pays if you’re found responsible.
For instance, if a neighbor visits and cuts their hand on a sharp object in your yard, this coverage could pay for their urgent care visit or stitches. The limit for this coverage is usually between $1,000 and $5,000.
This feature helps you avoid lawsuits by taking care of minor injuries quickly.
What’s Not Covered by Standard Homeowners Insurance?
While homeowners insurance covers a wide range of problems, there are several important things not usually included in a standard policy. Here are a few key exclusions:
1. Flood Damage
Flooding from heavy rains, overflowing rivers, or storm surges is not covered under standard homeowners insurance. If you live in a flood-prone area, you may need to buy a separate flood insurance policy.
2. Earthquakes
Damage from earthquakes, including aftershocks and ground movement, is also excluded. In some areas, you can add an earthquake endorsement to your policy or buy separate earthquake insurance.
3. Normal Wear and Tear
Insurance doesn’t cover damage from routine wear and tear, aging, or poor maintenance. For example, if your roof leaks due to old shingles, that would not be covered unless the leak was caused by a covered event (like a storm).
4. Pests and Infestations
Damage from termites, rodents, and insects is generally excluded from coverage. These are considered maintenance issues.
Optional Add-Ons (Endorsements)
If you want more protection, you can usually customize your policy with endorsements, also called riders. Common options include:
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Sewer backup coverage – Covers damage from water backing up into your home from drains or sump pumps.
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Identity theft protection – Helps cover expenses if you fall victim to identity theft.
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Home business coverage – Offers additional coverage if you run a business from home.
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Extended replacement cost – Provides extra money to rebuild your home if building costs rise unexpectedly after a disaster.
These add-ons increase your premium but can provide valuable peace of mind based on your individual needs.
Conclusion
Homeowners insurance is a vital part of protecting your investment in your home. It doesn’t just protect the structure; it also safeguards your personal belongings, helps you pay for temporary housing if needed, and covers you legally if someone gets hurt on your property.
Understanding what is and isn’t covered can help you make better decisions about the type of policy you need. It’s also smart to review your coverage once a year or after any major life or property changes to make sure you’re fully protected.
With the right homeowners insurance in place, you can live with greater peace of mind knowing you’re financially prepared for many of life’s surprises.