What Does Homeowners Insurance Cover?

What Is Homeowners Insurance?

Homeowners insurance is a contract between you and an insurance company that outlines the situations in which the insurance company will reimburse you for costs related to damage and theft.

What Does Homeowners Insurance Cover?

The most common homeowners insurance policy, called the HO-3, covers your house (dwelling structure) for any problem except those listed as exclusions in the policy.

Personal property is covered if the damage is from specific “perils,” which is insurance-speak for “problems.” An HO-3 policy covers personal property for these perils:

  • Accidental discharge or overflow of water or steam
  • Aircraft, including self-propelled missiles and spacecraft
  • Explosion
  • Falling objects
  • Fire or lightning
  • Freezing
  • Riot or civil commotion
  • Smoke
  • Sudden and accidental damage from artificially generated electrical current
  • Sudden and accidental tearing apart, cracking, burning or bulging
  • Theft
  • Vandalism or malicious mischief
  • Vehicles
  • Weight of ice, snow or sleet
  • Windstorm or hail
  • Volcanic eruption

If you want better coverage for your possessions, ask your insurance agent about an HO-5 or similar type of home insurance policy. (Not all insurers use these standard policy types.) An HO-5 policy covers your house and all your personal property for all problems except those that are specifically excluded.

Does Homeowners Insurance Cover Mold?

Mold damage may be covered by a homeowners insurance policy but it depends on the policy and the specific problem that caused the mold. Home insurance for mold damage typically covers sudden and accidental water damage, but they don’t cover mold damage caused by long-term leaks that you didn’t repair.

For instance, a home insurance policy will likely cover you if mold is the result of a burst pipe.

Does Homeowners Insurance Cover Roof Leaks?

Homeowners insurance for roof damage generally covers roof leaks that are the result of sudden and accidental damage, such as heavy rain and wind damage.

Home insurance won’t cover the roof if you didn’t properly maintain it.

Does Homeowners Insurance Cover Plumbing?

Home insurance for plumbing damage typically covers damage if it was sudden and accidental, such as a burst pipe, fire, falling object or frozen pipes in a heated room.

Home insurance won’t cover plumbing damage if it’s the result of wear and tear, frozen pipes in an unheated home, negligence, preventable leaks or sewer and sump pump backup (unless it specifically is added onto the policy).

Does Homeowners Insurance Cover Foundation Repair?

Home insurance covers foundation repairs following sudden and unexpected problems, such as:

  • Accidental and sudden water damage (such as a burst pipe).
  • Objects like trees falling on your home.
  • Home fires and wildfires.
  • Damage from smoke.
  • Lightning strikes.
  • Sudden and accidental events like a vehicle crashing into your house or an explosion caused by a gas leak.
  • Tornadoes.
  • Vandalism.
  • Windstorms.

Does Homeowners Insurance Cover Termite Damage?

Home insurance covers problems that are sudden and accidental. Termite damage is usually gradual and can be prevented with maintenance, so it is usually not covered.

But there are some rare exceptions when homeowners insurance covers termite damage, such as:

  • If termite damage causes a problem covered by your policy, such as termites chewing through wires and causing a fire. Your home insurance will cover the fire-related damage.
  • If a problem covered by your policy leads to termites, such as a sudden pipe burst that creates an environment that attracts termites.

Does Homeowners Insurance Cover Fires?

Home insurance covers accidental fires that damage your house and belongings.

The parts of coverage that pay for fire damage are dwelling coverage for your house, “other structures” coverage for sheds, detached garages and fences, and personal property coverage for your belongings.

Additional living expenses coverage, also called loss of use coverage, can reimburse you if you have to live elsewhere temporarily while your home is being repaired or rebuilt following problem covered by your policy, like a tornado.

Does Homeowners Insurance Cover Tree Removal?

Home insurance typically doesn’t cover tree removal for preventative purposes. You are responsible for paying to remove trees that may be leaning, rotting, dying or dangerous.

It’s a good idea to remove any dead or rotten trees. If a rotten or dead tree falls and damages your house or detached structure (like a shed), you may not be covered. That’s because most home insurance companies won’t cover problems caused by poor maintenance, which could include a failure to remove rotted and dead trees.

Your insurance company may cover the cost of tree removal up to a certain amount if it is part of a storm damage insurance claim, such as $500 or $1,000, depending on your policy. For example, if a lightning strike or windstorm causes a tree to fall and block your driveway, your insurance company might pay $500 for debris removal and you would be responsible for any tree removal costs that exceed this amount.

Does Homeowners Insurance Cover Water Damage?

Home insurance covers water damage for sudden and accidental problems, such as:

  • Accidental leaks such as a plumbing or appliance leak
  • Burst pipes
  • Ice dams
  • Water damage after a fire
  • Water damage from a storm

Home insurance does not cover water damage that was due to:

  • Damage due to neglect or lack of maintenance, such as not fixing a plumbing problem or failing to keep the heat on during freezing temperatures.
  • Earth movement such as an earthquake, landslide or mudslide.
  • Floods.
  • Repairing or replacing the source of water damage, such as fixing a broken dishwasher.
  • Seepage or leaks through a foundation.
  • Sewer or drain backup (unless you purchased extra coverage for this problem).
  • Swimming pool leaks.
  • Sump pump failure.

Does Homeowners Insurance Cover Roof Replacement?

Home insurance covers roof replacement for certain types of problems, such as:

  • Falling objects (like a tree)
  • Lightning
  • Fire and smoke
  • Vandalism
  • Weight of snow and ice
  • Wind and hail

Home insurance won’t cover roof damage for these types of problems:

  • Animals, such as termites and mice
  • Earthquakes
  • Gradual wear and tear
  • Homeowner neglect
  • Normal roof aging
  • Rot or mold

Does Homeowners Insurance Cover Theft?

Homeowners insurance covers theft and burglary, but how much you’re covered depends on your policy limits.

The coverage limit for personal property is typically set at 50% or 70% of the dwelling coverage amount. But certain items, such as jewelry, may only be covered up to a certain amount for theft, such as $1,500. Consider scheduled personal property coverage. Scheduled personal property—also called an endorsement, floater or rider—is optional coverage to your homeowners insurance policy that provides more coverage for high-value items.

What Disasters Does Homeowners Insurance Cover?

Home insurance covers storms and wind in most states, though you may have a separate hurricane insurance deductible if you file a claim. A standard home insurance policy doesn’t cover flood damage, but you can buy a separate flood insurance policy.

Home insurance also doesn’t cover earthquake damage, but you can buy earthquake insurance.

What Is Not Covered by Homeowners Insurance?

Common exclusions in a standard homeowners insurance policy include:

  1. Earth movement, including earthquakes, mudslides, mudflow, sinkholes, shockwaves or tremors due to a volcanic eruption, and any other earth movement such as sinking, rising or shifting.
  2. Governmental action, such as the destruction, confiscation or seizure of your property.
  3. Intentional damage that you or your household members do. (Vandalism by someone else is covered.)
  4. Neglect, such as not taking proper care of your property.
  5. Nuclear hazard.
  6. Ordinance or law, meaning situations where the government requires you to demolish, rebuild, renovate or repair your home to meet local ordinances.
  7. Power failure if it happens off the property. If the power failure is caused by something on the property, home insurance typically covers damage from a power failure.
  8. War.
  9. Water damage, including floods, water that backs up through sewers or drains (unless you have added special coverage for this), and leaks from swimming pools or other structures.

What Coverage Types Are Included in a Homeowners Insurance Policy?

Dwelling Coverage

Dwelling coverage, or hazard insurance, pays to rebuild or repair the physical structure of your house if it’s damaged by a problem covered by the policy, like a fire or damage from a fallen tree.

Other Structures Coverage

Your dwelling not only includes your house, but also other structures such as a garage, deck or back porch, as long as the structure is attached to your home. Detached structures, like a shed or fence, are typically covered under your “other structures coverage.”

Personal Property Coverage

Personal property coverage pays to replace or repair your belongings after a problem covered by the policy. Personal property can include things like your clothes, electronics, jewelry, pots and pans, furniture, rugs, even the little knick-knacks and decorations you keep on your bookshelves.

Personal property coverage is generally set between 50% to 70% of your dwelling coverage. For example, if your house is insured for $300,000 and your personal property is set at 50%, you would have $150,000 for personal property.

You can buy more personal property coverage. You can determine how much you need by calculating how much it would cost to replace everything you own if your house were destroyed in a worst-case scenario (like a fire or tornado). Creating a home inventory is a good way to start.

A good home inventory has an item description, the estimated value, purchase date, and receipts and serial numbers (if available). A home inventory can be as simple as a written list, pictures, video, or an inventory done in a mobile app.

Certain categories of items, such as musical instruments, jewelry and electronics have a limit on how much your insurance company will pay to replace them if they are stolen. For example, your policy might theft of jewelry to $1,500. If you want more coverage, you can “schedule” certain high-value items.

Liability Insurance

Liability insurance pays for accidental injuries and property damage to others that you or your household members are responsible for. Homeowners liability insurance also pays for your legal defense if someone sues you because of an injury or damage that’s covered by your home insurance. Here are some examples of when liability coverage can pay out:

  • A guest slips on your icy sidewalk and gets hurt.
  • Your dog bites someone and causes injury.
  • Your dog destroys someone else’s fence.
  • Your child accidentally hits a baseball through a neighbor’s window.

Generally, liability limits start at $100,000 of coverage, but you can buy higher amounts. If you have significant assets, you should also buy an umbrella insurance policy, which costs an average of $380 per year for $1 million to $2 million in coverage, according to Trusted Choice, a group for independent insurance agents.

Medical Payments to Others Coverage

Medical payments coverage in home insurance can pay for minor injuries if a guest is hurt on your property. This coverage is usually sold in a small amount, typically between $1,000 and $5,000. It’s a good way to cover basic medical expenses without legal complications (such as a lawsuit). More expensive injury claims would fall under your liability insurance.

Loss of Use/Additional Living Expenses Coverage

If you cannot live in your home because of a problem covered by the policy, such as a fire, loss of use coverage reimburses you for extra expenses like hotel bills, meals and other costs (such as laundry services and pet boarding fees).

Loss of use coverage is often set at a certain percentage of your dwelling coverage. For example, if your loss of use limit is 30% of your dwelling coverage, and your dwelling coverage is $300,000, you would have up to $90,000 for additional living expenses. You may be able to increase the coverage limit.

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