What Does Homeowners Insurance Cover?
Homeowners insurance is essential for protecting your home and belongings from unexpected disasters. It covers damages caused by events such as fire, wind, and theft, and provides liability protection if you accidentally harm others or their property.
Key Takeaways
Homeowners insurance: Pays to repair or replace damaged property, including your home and personal belongings.
Covered events: Typically includes fire, wind, hail, and snow, but excludes floods and earthquakes.
Liability protection: Covers legal and medical expenses if you injure someone or damage their property.
Why Homeowners Insurance is Important
Your home is likely your most valuable asset, and replacing it out of pocket in the event of a disaster can be financially devastating. Homeowners insurance provides the financial safety net you need to protect your investment and ensure you can recover from unexpected events.
What Does Homeowners Insurance Cover?
Homeowners insurance offers comprehensive coverage for your house and belongings, protecting you from various risks. It typically covers:
Dwelling Coverage
Dwelling coverage protects the structure of your home and attached structures. It typically includes built-in appliances and attached features like garages and decks.
Covered Events: Most policies cover damages from events such as fire, wind, hail, lightning, and burst pipes.
Example: A heavy storm blows multiple trees onto your house, damaging the roof. You would pay your deductible, and the insurance covers the rest up to your policy limit.
Other Structures Coverage
This coverage protects structures on your property that aren't attached to your house, such as fences, sheds, and detached garages.
Covered Events: Includes fire, wind, hail, snow, and other common perils.
Example: A major snowstorm causes your utility shed to collapse. The insurance would pay for repairs, minus your deductible.
Personal Property Coverage
Personal property coverage protects your belongings, both inside and outside your home.
Covered Events: Typically covers listed perils such as fire, theft, vandalism, wind, hail, and water damage from plumbing issues.
Example: A fire starts in your kitchen and spreads, damaging your furniture and electronics. While dwelling coverage pays for structural damage, personal property coverage compensates for your ruined belongings, minus your deductible.
Loss of Use Coverage
Loss of use coverage helps pay for additional living expenses if your home is uninhabitable due to a covered disaster.
Covered Events: Applies if your home is being repaired for damages covered by your policy.
Example: After the trees hit your home from the thunderstorm, you need to stay in a hotel for a few weeks. Your insurance covers the hotel bills and other living expenses during this period.
Personal Liability Coverage
Liability coverage provides financial protection if you are responsible for injuring someone or damaging their property.
Covered Events: Bodily injury and property damage to others, excluding intentional acts and car accidents.
Example: A visitor slips on your icy driveway and breaks their arm. Your liability coverage pays for their medical expenses and any legal fees if they sue.
Medical Payments Coverage
Medical payments coverage pays for minor injuries sustained by others on your property, regardless of fault.
Covered Events: Covers injuries on your property and harm caused by you or your pets off your property.
Example: Your dog chases your mailman from the front door and bites him before he can escape the fence. Your medical payments coverage pays for their medical treatment, even if you’re not at fault.
What Homeowners Insurance Won’t Cover
Homeowners insurance doesn't cover every possible risk. Common exclusions include:
Flooding: Damage from external water sources like heavy rainfall or storm surges.
Earthquakes: Damage from seismic events, including landslides and sinkholes.
Wear and Tear: Damage from neglect or lack of maintenance.
Infestations: Damage from birds, vermin, fungus, or mold.
Government Actions: Including war and nuclear hazards.
Power Failure: Damage from power outages.
You can purchase separate policies for some of these risks, such as flood and earthquake insurance.
Expanding Your Coverage with Endorsements
If standard coverage isn’t enough, you can add endorsements to your policy for additional protection:
Scheduled Personal Property
Covers high-value items like jewelry or musical instruments.
Ordinance or Law Coverage
Pays for upgrades to meet current building codes during repairs.
Water Backup Coverage
Covers damage from backed-up sewer lines, drains, or sump pumps.
Equipment Breakdown Coverage
Covers repairs for major home systems and appliances.
Service Line Protection
Covers damage to utility lines for which you are responsible.
Identity Theft Insurance
Pays expenses related to identity theft, including lost wages and legal fees.
Discuss your specific needs with your insurer to ensure you have the right coverage for your home. Homeowners insurance is a critical part of protecting your home and financial well-being. By understanding your policy and considering additional coverage options, you can ensure you’re fully prepared for whatever comes your way.
