What Does Home Insurance Cover? 

by Dawn Klintworth

Buying a home is a major accomplishment. In addition to your sense of pride, you may also be a little concerned about the financial responsibility of home ownership. While you’ll have to handle those mortgage payments, having reliable homeowners insurance can give you financial protection against many threats to your home and your finances.

But what does home insurance cover? And equally as important, what doesn’t home insurance cover? 

This article provides a general explanation of how home insurance coverages are designed to work. Your actual protection if you have a claim will depend on the types of coverages and limits you selected when you bought or renewed your home insurance. Your homeowners insurance policy includes the full details of your coverage with any restrictions or exclusions. 

Key takeaways

• Home insurance:
  • is a contract between a homeowner and their insurance company.
  • protects against certain types of events, like fire, wind, hail, lightning, theft and more as outlined in the homeowner insurance policy.
  • does not cover damage resulting from maintenance issues or damage that occurs over a long period of time.
• You may need to add protection to your standard home insurance policy, like sump pump failure or earthquake protection.
• You may need to complement your home insurance policy with other types of protection to properly cover your home.

What is homeowners insurance? 

Let’s start with the basics. Homeowners insurance is a contract between you as a homeowner and your insurance company. The insurance company agrees to provide protection for your home, as outlined in your home insurance policy, and you agree to pay regularly (usually monthly, semi-annually or annually) for that protection. That regular homeowners insurance payment is known as your premium. 

What events are covered by home insurance? 

Many people think of storm damage or fire when they think of home insurance protection. But those are just two types of events, known as perils, that are covered by home insurance. You'll find the covered perils listed in your homeowners insurance policy. Common examples* of perils include:  

• Fire or lightning 
• Hail 
• Windstorm 
• Vandalism 
• Theft 
• Smoke 
• Electrical damage 
• Frozen pipes  

* This list of perils is not exhaustive and not intended to represent perils that are covered in all home insurance policies. Coverage for certain perils may be optional and must be purchased by the homeowner for an additional cost.  Learn more about home insurance coverage.  

Does home insurance cover more than my home? 

Other ways home insurance protects you when your home is damaged by a covered event: 

Auxiliary private structures coverage 

Auxiliary private structures coverage protects fences, sheds, detached garages and other identified structures on your property.  

Personal property coverage 

Personal property coverage is designed to protect your belongings, the items that are in your home. From furniture and electronics to your clothes and home décor items, your personal property coverage may provide coverage if your belongings were damaged by a covered event, up to the limits of your policy.  

Personal property coverage also has limits on certain categories of belongings. For higher valued items, talk to your insurance agent about identifying those items for additional protection, known as scheduled personal property coverage.  

Additional living expense coverage 

Additional living expense coverage helps with the cost  of a rental property, hotel or other alternatives when your home is damaged by a covered event and is uninhabitable. 

Ways your homeowners insurance protects you from financial costs when people are injured on your property or when you or someone in your household causes damage to others:

Liability coverage 

Liability coverage provides protection when you are legally responsible for injuries to others or damage to other people’s property. 

Medical payments coverage 

Medical payments coverage covers medical costs associated with injuries that happen on your property or that you or a member of your household cause.   

What’s not covered by home insurance? 

Generally, home insurance protects against sudden damage caused by a storm, fire, wind, hail, vandalism or other covered perils. When damage happens over time due to age, wear and tear, or maintenance issues, those repairs are generally not covered by home insurance.

Examples of what’s not covered by home insurance

• A rotting deck: A wooden deck ages and rot makes it unsafe to use. Replacing that deck would not be covered by insurance. 

• A moldy basement: You find mold in your damp basement and need to have it removed to make your home safe. That mold grew over time and was not the result of a covered peril. In most cases, this would not be covered by home insurance.

How much home insurance do I need? 

A standard home insurance policy will provide base protection for your home and its contents. However, depending on your situation, you may need to add more coverage to your policy or buy other types of policies to protect your home. Keep reading to determine how much home insurance you need.

Additional home insurance coverage

Valuables, antiques and collectibles 

Your home insurance covers your belongings, but some categories of possessions have limits. If you have higher value jewelry or own a collection that exceeds those limits of your policy, you can identify those valuables for added coverage. Known as scheduled personal property  coverage, you can buy protection for those treasured items. While in most cases, you will not be able to replace them if they are damaged or stolen, by scheduling them and their value on your home insurance, you will be financially compensated for their loss.

Sump pump and sewer backup 

Sump pump failure and sewer water or street drainage backing up into your home is excluded from home insurance policies, but you can add a sump pump and sewer backup endorsement  to your policy to provide this additional protection.

Earthquake endorsement 

Earthquake damage is excluded from home insurance coverage, but you can add the Earthquake Endorsement to your policy. 

Metal roof – cosmetic coverage

Metal roofs are becoming more common.  For roof damage from a covered storm like a hailstorm, your home insurance will pay for structural damage to your metal roof. However, if the damage is only cosmetic, like the small dents caused by hail, you need to have cosmetic metal roof protection  on your policy to get the damage covered. This coverage is available as an endorsement.

Other protection to complement your home insurance

Flood insurance 

Flood insurance provides protection specifically for flood water damaging your property. Offered by the federal government and limited private insurance companies, your property needs to meet certain guidelines to qualify. Talk to your insurance agent for more information. 

Umbrella liability insurance

Umbrella insurance protects you if you need additional liability insurance. An umbrella policy extends the liability protection of both your home and car insurance at a relatively low cost. Talk with your insurance agent to see if this type of policy makes sense for you. 

Home or extended warranties

While these are not insurance policies, home warranties or extended warranties can provide protection for repair or replacement of appliances and home systems, like HVAC. These are not part of your home insurance and generally not offered by insurance companies.

Meet with your insurance agent

If you have more questions about home insurance and how to best protect the investment you’ve made in your home, talk to your local insurance agent.  

Updated 5-31-23