Updated: May 21, 2025
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Understanding your homeowners insurance coverage helps you avoid gaps and ensures you’re protected against major financial risks.
Homeowners insurance includes liability protection, covering medical costs or legal fees if someone is injured on your property.
Loss of use coverage reimburses you for temporary living expenses if a covered event forces you to leave your home.
Homeowners insurance covers the costs of repairing or replacing your home and belongings if certain events like fire, theft or natural disasters damage them. It also offers protection against liability if someone is injured on your property.
Understanding these aspects of home insurance coverage will help you gauge how much home insurance you need. Here’s a quick look at the standard homeowners insurance coverages:
Coverage Type | Description |
|---|---|
Covers repairs or rebuilding of your home’s structure, including walls, plumbing and electrical systems. | |
Covers repairs or replacement of separate structures on your property, like sheds or fences, up to 10% of your dwelling limit. | |
Covers the cost of damaged or stolen personal items like furniture, electronics and clothing. | |
Covers extra living expenses if you need to relocate temporarily, like dining out and lost rental income. | |
Protects against financial responsibility if someone is injured or their property is damaged on your premises. | |
Covers medical expenses if someone is injured on your property, regardless of fault. |
Dwelling coverage in homeowners insurance protects the cost to repair or rebuild your home if it's damaged by a covered peril. It safeguards the physical structure of your home, including the walls, roof and foundation.
This home insurance coverage is essential for ensuring the restoration of your home to its original condition after a loss. Without sufficient dwelling coverage, you could be left paying out-of-pocket for significant repairs or a total rebuild.
While these can vary from policy to policy, these are the parts of your home that dwelling coverage covers:
In homeowners insurance, other structures coverage pays to repair or replace the structures on your property that are not attached to your primary dwelling, like detached garages or fences. This coverage protects these additional structures from potential damages, ensuring comprehensive home insurance coverage. Some examples of other structures that home insurance covers include:
Beyond the foundation and overall structure of your home, your personal belongings are also covered by homeowners insurance under personal property coverage. For instance, if your appliances or furniture become damaged due to an unexpected fire, your home insurance policy will pay to repair or replace what got lost in the damage.
Some examples of personal belongings covered by homeowners insurance include:
Although personal property coverage in homeowners insurance covers your belongings, high-value items like expensive jewelry or fine art may exceed standard coverage limits. Consider adding a scheduled personal property endorsement to your policy to ensure these valuables are fully protected.
Home insurance can cover your belongings in one of two ways: actual cash value (ACV) or replacement cost value (RCV). ACV reimburses you for the current value of your items, factoring in depreciation, while RCV covers the full cost of replacing your items with new ones of similar kind and quality.
For example, with ACV, if your five-year-old TV is damaged, you would receive the amount it's worth today, whereas with RCV, you'd be compensated enough to buy a new TV of a similar make and model.
By default, dwelling coverage is reimbursed based on RCV, while personal property coverage is reimbursed by ACV. However, some providers may offer the option to upgrade your personal property coverage to RCV for an additional premium.
Loss of use coverage in home insurance, also known as additional living expenses (ALE), reimburses you for temporary living expenses if your home is uninhabitable because of a covered peril. During the process of repairing or rebuilding your home, this coverage ensures you can maintain your standard of living.
Here’s what homeowners insurance covers under loss of use:
Personal liability coverage is a homeowners insurance coverage that protects you financially if you're found legally responsible for causing injury to someone else or damaging their property. This coverage not only pays for legal fees if you’re sued, but it also covers the cost of settlements or judgments against you up to the limits of your policy. It provides a safety net that helps ensure your personal assets aren't drained due to unexpected incidents that lead to legal action.
For example, if your dog accidentally bites a guest or someone slips and falls on your property, home insurance coverage would cover their medical expenses and any legal costs if they decide to sue. And if your child accidentally damages a neighbor's expensive garden feature, your coverage may also pay for the repairs or replacement.
If someone gets injured on your property, medical payments coverage in home insurance pays for the related expenses regardless of who is at fault. Unlike personal liability coverage, this is designed to handle smaller claims and help avoid potential lawsuits by covering medical bills for guests who may slip, trip or suffer another minor injury while visiting your home. This coverage includes costs for first aid, hospital visits or even necessary surgeries due to injuries sustained on your property.
Homeowners insurance doesn't cover damage from floods, earthquakes, routine wear and tear or mold and rot. These exclusions often require separate policies or specific endorsements for protection because they involve risks that are either gradual, preventable or severe enough to necessitate additional coverage.
Standard homeowners insurance does not cover damage caused by flooding, which includes water from rising rivers, storm surges or heavy rainfall. Flooding is considered a high-risk event that requires a separate flood insurance policy, often available through the National Flood Insurance Program (NFIP) or private insurers.
Damage caused by earthquakes is another exclusion from most standard policies. Earthquakes can cause significant structural damage, and due to the unpredictable and severe nature of these events, you must purchase separate earthquake insurance to ensure protection.
Homeowners insurance is designed to cover sudden and accidental damage, not the gradual deterioration of your home due to normal wear and tear or poor maintenance. Issues like roof leaks due to old shingles or plumbing problems from neglected pipes are considered the homeowner's responsibility to prevent and repair.
Mold and rot are typically excluded unless they result from a covered peril, like a burst pipe. Because mold and rot usually develop over time and can often be prevented through regular home maintenance, they are generally not covered by standard homeowners insurance.
Although a standard homeowners policy covers many risks, there are limits. Below, we break down what homeowners insurance typically does — and doesn’t — cover for specific situations and repairs.
Homeowners insurance will pay for animal damage as long as it is determined which animal caused the damage and to what extent. Remember that covered animal damage does not apply to your pets — only to wild animals.
Homeowners insurance covers electrical panels damaged by unforeseen events like fires or storms. Ensure regular maintenance and code compliance for continued coverage, especially if your panel is over 20 years old.
Home insurance generally covers foundation leaks only if they result from a covered peril listed in your policy, such as sudden and accidental damage to plumbing, heating or air conditioning systems.
A standard homeowners insurance policy pays for lost and stolen jewelry. You can file a claim on losses that involve theft or peril. For instance, special personal property insurance might pay for your stolen jewelry if someone breaks into your house and steals your belongings. Basic coverage for jewelry is relatively low, so you may want to purchase additional coverage for pieces with precious stones and metals.
Pet damage is covered by homeowners insurance — if your pet damages someone else’s belongings, the policy’s personal liability component covers it. However, damage to your own property caused by your pet is usually excluded.
Homeowners insurance covers water damage from covered perils under dwelling coverage, but not floods. Sewer backup and hidden water damage usually require endorsements. To protect against flood damage, you need separate flood or difference in condition (DIC) insurance, which few insurers offer.
Homeowners insurance covers plumbing repairs when the damage results from sudden or accidental events, like a fire or burst pipe. But it typically won’t cover issues caused by wear and tear or lack of maintenance. Regular inspections and proactive maintenance are crucial to avoid risks not covered by standard policies.
Lightning strikes are regarded as insured perils, and damage from them is typically covered by standard homeowners insurance plans. In the event that lightning strikes your home, protection offers complete assistance through additional living expenses, personal property coverage and dwelling coverage.
In certain cases, homeowners insurance will pay for contractor-caused damage to the property while doing their work. But coverage frequently varies based on the incident's details and your insurance policy.
Septic tanks are covered by standard homeowners insurance, but only if the damage is caused by an insured danger, such as fire or theft. Note that insurance will not cover replacement or repair costs if the policyholder's negligence caused the damage.
Homeowners insurance typically covers roof leaks caused by a named peril. But it won’t cover leaks resulting from wear and tear, pests, mold or lack of maintenance.
Standard policies cover hurricane damage to your home's structure, other structures and personal property coverage. But most policies do not cover water damage caused by flooding or storm surges from a hurricane, so separate flood insurance is needed for full protection.
Homeowners insurance typically does not cover termite damage because it is considered a preventable maintenance issue. Termite damage is seen as the result of neglect rather than a sudden, unforeseen event.
Slab leak repairs may be covered by homeowners insurance if the leak is caused by a sudden, accidental event, like a burst pipe. However, coverage is unlikely if the leak is due to poor maintenance or gradual wear and tear.
Homeowners insurance generally covers damage from leaking pipes if the leak is sudden and accidental. However, if the leak is due to a lack of maintenance, the repairs to the pipe itself might not be covered.
Homeowners insurance may cover tree removal if the tree falls due to a covered peril, such as a storm or fire, and damages your home or blocks a driveway. Routine tree removal without any associated damage is usually not covered.
Homeowners insurance generally does not cover asbestos removal because it is considered a maintenance issue and not a sudden loss. If asbestos is disturbed during a covered event, such as a fire, the cleanup might be covered.
Mold damage is typically covered by homeowners insurance if it results from a covered peril, like water damage from a burst pipe. But if the mold is due to neglect or poor maintenance, it’s unlikely to be covered.
Homeowners insurance usually covers liability for dog bites under the personal liability portion of the policy. But coverage can vary depending on the breed of the dog and the specific policy terms.
In addition to standard home insurance coverages, homeowners can add endorsements or additional coverages to their policy, such as scheduled personal property or cyber event and ID theft protection. These optional policy enhancements provide extra protection tailored to specific risks or valuable items not fully covered under a standard policy.
Below is a list of common home insurance endorsements, each offering distinct benefits to help safeguard your home and assets.
Specifically covers damage to your home and belongings caused by an earthquake, which is typically excluded from standard home insurance policies.
Covers damage to your home and belongings caused by flooding, which is not included in a standard homeowners policy and often requires a separate policy through the National Flood Insurance Program (NFIP) or a private insurer.
Covers water damage caused by the backup of your sewer or drain or a sump pump failure, which is typically not included in standard home insurance policies.
Provides greater coverage for valuables that exceed the limits of your standard personal property coverage, such as jewelry, fine art or collectibles. This endorsement ensures these items are covered for their full value.
Protects against the financial losses associated with identity theft or cybercrime, including expenses related to restoring your identity, legal fees and sometimes even ransom payments in the case of cyber extortion.
Covers the additional costs required to bring your home up to current building codes or ordinances after a covered loss. This is particularly useful if your home is older and existing codes have changed since it was built.
Provides additional coverage beyond your policy’s limit if the cost to rebuild your home after a covered loss exceeds the dwelling coverage amount, often due to increased construction costs or demand.
Covers the additional costs of using environmentally friendly materials and products if your home needs to be repaired or rebuilt after a covered loss, supporting a more sustainable rebuild process.
Homeowners insurance is designed to cover sudden and accidental incidents, such as a fire or theft. We've compiled a table highlighting different damages and perils to help you identify what’s covered.
Items marked “No” mean that you’ll likely need additional coverage, while items marked “Yes” mean they are typically included in standard policies. Those marked “Sometimes” can depend on the insurer because they can sometimes be included to a certain extent or need an additional policy.
Standard Homeowners Insurance Policy Coverages | Covered (Yes/No/Sometimes) |
|---|---|
Asbestos Removal | Sometimes |
AC Units | Yes |
Additional Structures | Sometimes |
Bodily Injuries | Yes |
Earthquakes | No |
Electrical Panel Replacement | Sometimes |
Fallen Trees | Sometimes |
Fences | Yes |
Fire | Yes |
Flooded Basements | Sometimes |
Floods (Natural Disasters) | No |
Foundation Repair | Sometimes |
Hail | Yes |
Hurricanes | Sometimes |
Items in Storage Units | Yes |
Jewelry | Sometimes |
Landscaping | Yes |
Landslides and Mudslides | No |
Lighting | Yes |
Mold | Sometimes |
Pet Damage | Sometimes |
Roof Leaks | Sometimes |
Septic Tanks | Yes |
Sewer Line Replacement | Sometimes |
Slips and Falls | Yes |
Structural Damage | Yes |
Swimming Pools | Yes |
Termites | No |
Theft | Yes |
Trampolines and Tree Houses | Sometimes |
Vandalism | Yes |
Water Damage | Sometimes |
Wild Animal Damage | Sometimes |
Wild Fire | Yes |
Windstorm | Yes |
Homeowners insurance protects you against unexpected losses by covering your home, belongings, living expenses and liability after covered events. But not every disaster is covered — understand your policy’s limits and consider extra coverage if you live in high-risk areas like flood or earthquake zones.
We answered some common questions about homeowners insurance to help you make the best decisions about your coverage.
The different types of homeowners insurance include HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7 and HO-8, although homeowners typically get HO-3 or HO-5. HO-4 only applies to condo and apartment units.
You can switch insurance providers any time you want. But some companies might charge cancellation fees if your policy hasn’t ended yet.
If you’ve paid all your premiums yet you still have a few dollars left from your insurance benefits, you can pocket the difference. Just make sure you didn’t overinflate your claim. Either way, insurers have rigid claims processing departments, so you likely won’t get any leftovers. If anything, you might have to shoulder some expenses yourself.
Homeowners insurance is a type of property insurance and only covers detached houses. You’ll need another type of property insurance for condominium units, apartments, mobile homes, commercial properties and row houses, among other structures. Property insurance encompasses flood and earthquake insurance.
Your premiums will increase if you keep filing claims. In the worst case, your insurer might not renew your policy. Remember: insurance companies lose money on claims. They would rather focus resources on client acquisition instead of insuring high-risk, non-insurable policyholders.
Homeowners insurance often covers tree damage on a neighbor's property under certain conditions. If a healthy tree from your property falls due to events like storms, your neighbor's policy usually covers it. But it may be your responsibility if the tree is a known hazard or damaged.
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay — showing why it’s important to compare rates.
Homeowner Profile
For our analysis, we created a sample homeowner profile with the following characteristics:
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
