What does homeowners insurance cover?

Understanding your homeowners insurance policy can be difficult, but StrongInsurance experts can assist you. Knowing what your homeowners policy covers and how it works is critical to ensuring your financial security. Here's what you can do to safeguard one of your most valuable financial investments.

What does home insurance cover?

Most standard homeowners insurance policies include the following five types of coverage:

Additional types of coverage, such as medical payments, scheduled personal property, and sewer backup, are considered add-ons.

Dwelling coverage

Your homeowner's policy is intended to pay for the rebuilding or repair of your home in the event of a specified disaster such as fire, wind, hail, or lightning. Dwelling coverage includes the main structure of your home and any attached structures, but excludes any detached structures on the same property.

Other structures coverage

Other structures coverage is intended to protect detached structures on your property. Detached garages, sheds, barns, gazebos, and fences are examples of detached structures.

Personal property coverage

Personal belongings coverage will pay the value of your damaged or lost possessions, such as furniture, electronics, clothing, and collectibles. In some cases, trees, plants, and shrubs are also protected. Personal property coverage extends to items stored off-site as well.

If you are unsure how much coverage you require, you can conduct a home inventory to determine the best home insurance plan for you.

Liability protection

If you are found legally responsible for damage to others' property or personal injury to others, liability insurance protects you from financial losses. Unless specifically excluded, this insurance covers damage caused by family members and even pets. Depending on your policy, liability protection will cover court awards and expenses.

If you believe you require more liability protection than a standard homeowner's policy provides, consider purchasing an umbrella liability policy, which provides broader coverage and higher liability limits.

Additional living expenses (ALE)

If damages make your home uninhabitable, this kind of coverage pays for the additional costs of living somewhere else until your home is repaired or rebuilt. It could include hotel and restaurant expenses, as well as other costs you may incur during that time, such as laundromat fees and pet boarding. This coverage has limitations and, in some cases, a time limit.

What does homeowners insurance not cover?

There are some important exclusions to be aware of when purchasing homeowners insurance that will help you decide whether additional coverage is required. Keep in mind that most policies provide additional, optional coverage for items not covered by homeowners insurance.

Earthquake and flood damage

Damage caused by earthquakes and floods is generally not covered by a standard homeowners policy, but can be purchased as a separate policy — or, in some cases, as an endorsement. While earthquake insurance is generally optional, your lender may require you to purchase flood insurance if your home is in or near a flood zone.

Water damage

Some water damage is covered by your policy, but some situations are not. Water damage issues involving your sewage systems, such as an overflow or backup, are not usually covered, but coverage can be added as an endorsement.

Homeowners neglect

Proper care and routine maintenance are essential for keeping your property in good condition. Keeping up with cleanings, home system repairs, and inspections can save you a lot of heartache in the long run. Homeowners insurance does not cover any damages caused by neglect or failure to properly maintain your home.

These include, but are not limited to:

  • Termites and insect damage
  • Mold
  • Rust
  • Bird or rodent damage
  • General wear and tear

Maintain your home on a regular basis to avoid costly repairs that your insurance policy may not cover.

Identity theft

Typically, homeowners insurance does not cover expenses incurred as a result of identity theft, such as someone using your credit card to purchase new furniture. This is usually available as an add-on to a separate identity theft plan or, in some cases, as an endorsement to your homeowners policy. Some insurers include this coverage as standard in standard home insurance policies.

Choosing the right homeowners insurance coverage

The cost of coverage is only one consideration when selecting the best homeowners insurance company. Each person has different expectations of their insurance company, whether it's 24/7 claims response, online and mobile accessibility, or the ability to speak with a dedicated agent who knows their name every time they call.

Consider a company that has special endorsements that fit your needs if you have unique coverage needs or home characteristics, such as living in a historic home. Knowing how to select the best home insurance company for you will ensure that you are financially protected in the event of a loss.