What's Covered & What's Not

What You Should Know About: 

Your Standard Homeowners Insurance Policy

Avoid unpleasant surprises: know what is and isn’t covered before you suffer a loss.

Three things you should know:

1. A standard homeowners policy includes four essential types of coverage: Structure, Contents, Liability and Living Expenses.
2. Damage caused by most disasters is covered, but there are exceptions – and there are insurance options to cover those exceptions in most cases.
3. Damage to your home from maintenance-related problems are typically the homeowners’ responsibility and may not be covered by insurance.

Homeowners Insurance provides financial protection if your home or its contents are damaged or destroyed by a variety of perils. Most home insurance policies pay for damage to the structure and contents of your home caused by a covered peril (a sudden and accidental event that causes damage or loss). Because covered perils may vary by policy type and company, it’s important to know what is and isn’t covered under your standard homeowners policy so you’re not caught off guard if disaster strikes. To avoid any unwanted surprises, talk with your insurance agent or company when you buy coverage – and do an annual insurance checkup – so you know you’re covered before a loss occurs.

What’s Covered

Standard Homeowners Insurance provides coverage for damage caused by  perils including:

• Fire
• Hail
• Theft
• Wind
• Lightning
• Vandalism
• Explosions
• Freezing weather

If your needs are greater than what the standard policy will allow, you may be able to supplement your coverage with an endorsement – sometimes called a rider or floater – that will provide extra coverage for your home and its contents, for an additional premium. Four essential types of coverage typically exist in a standard homeowners policy:

Coverage for the structure of your home This pays to repair or rebuild a home if it is damaged or destroyed by fire, wind, hail, lightning or other event listed in the policy. Structures not attached to the house, such as a garage or tool shed, are also covered.

Coverage for your personal belongings Standard homeowners insurance policies provide coverage for your personal belongings, such as furniture, clothes, sports equipment and computers, in an amount equal to 50 to 70 percent of the amount of insurance you have on the structure or “dwelling”. This part of the policy includes off-premises coverage, which means that your belongings are covered anywhere in the world – in your car, in a storage facility, in your luggage, or on your person. Trees, plants and shrubs on your property also are covered, but generally up to only a $500 limit (and the policy does not include damage from wind or disease).

Homeowner Liability Protection This part of the policy protects you against claims for property damage or bodily injury filed against you by others. It also pays for damage or injuries caused by your pets. Your Homeowners’ liability coverage will pay a judgment or settlement arising from accidental acts by you or an insured member of your family, and will also help pay to defend you in legal actions arising from an insured claim. Homeowners insurance policies provide a minimum of $100,000 liability coverage, but higher limits are available. Most insurers offer Homeowners Liability Coverage up to $500,000 per incident. 

Concerned about protecting your assets above $500,000? You may want to consider an Umbrella Policy, which provides broader coverage, offers protection of $1 million to $5 million and kicks in when you reach the limit on your standard liability coverage.

Additional living expenses This pays the additional costs of living away from home if you must relocate temporarily due to damage from a fire, storm or other covered peril. It helps pay hotel bills, restaurant meals and other living expenses incurred while your home is being repaired or rebuilt. It may also be available to help pay living expenses if an approaching wildfire forces an evacuation of your home. Coverage amounts and exclusions differ from company to company – check your policy for specifics or contact your insurance company or agent to find out more.

What’s Not Covered

Specific disasters: Damage caused by earthquake, flooding, sewage line backup, landslide/mudslide and earth movement (including sink holes) is specifically excluded from a standard homeowners policy but typically can be purchased separately. 

Acts of war: Acts of war – including terrorism events, as well as nuclear accidents are specifically excluded from standard homeowners insurance policies. 

Maintenance/wear and tear: Normal wear and tear, as well as damage resulting from failure to properly maintain your home will likely be excluded in your homeowners policy. If your rain gutters are clogged with dead leaves and debris, and water backs up and leaks into your walls, your insurer may deny a claim for that damage. Take care of your home and your insurance will take care of you!

Video: Winterizing Your Home 

High-value items need extra coverage: Theft or damage of expensive jewelry, antiques/collectibles, golf clubs or other high-value items may require additional coverage under the terms of your standard homeowners too. Check with your agent or insurance company about purchasing an endorsement or separate policy to cover these items.

Running a home-based business, or renting all or a portion of your home in the “sharing economy?”: Any damage or loss connected to a home business is not covered by a standard homeowners policy. However, coverage for a home-based business is usually available and can be purchased separately.

*Some information provided by Insurance Information Institute