What Does Homeowners Insurance Cover?

A home is the most valueable asset most Americans have. Homeowners insurance offers protection for your home and personal possessions.

Although homeowners insurance is not required by law, if you have a mortgage, your lender will require it to protect the home. If you live in a disaster-prone area, you may need additional coverage for risks like floods or earthquakes.

Understanding Homeowners Insurance Coverage

Homeowners insurance protects you from financial hardship should you experience a home-related loss.

What Is Covered by a Standard Homeowners Insurance Policy?

A standard homeowners insurance will cover your dwelling and your personal belongings, and offer personal liability coverage for injuries that happen on your property. Additionally, homeowners insurance provides "loss of use" if you need to relocate because your home is temporarily unlivable.

Damage to your home and belongings must come from a peril. A peril refers to a specific event that caused damage to your home and belongings.

Common insurance perils are:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riots
• Aircraft
• Vehicles
• Smoke
• Vandalism
• Theft
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam
• Sudden and accidental tearing, cracking, burning, or bulging
• Freezing
• Sudden and accidental damage due to short-circuiting
• Volcanic eruption

What Perils Are Excluded From Coverage?

The events that are typically excluded from homeowners insurance coverage include the following:

• Flooding
• Earthquakes
• Sewer and drain backups
• Termite and pest infestations
• Normal wear and tear
• Lack of maintenance
• War or nuclear hazards
• Intentional damage

How to Read Your Policy and Coverage Limits

To understand your policy and coverage limits, you'll want to read the declarations page of your policy. On this page, you'll find everything you need to know about your coverage types, limits, and deductibles. Perils and exclusions will tell you what's covered and what's not. If you're unsure about any terms, ask your insurance agent for a walkthrough.

Does Homeowners Insurance Cover Mold?

When Mold Damage Is Covered

Mold in your home can be covered if it's caused by a covered peril that's listed in your policy, like a burst pipe or water damage from a sudden appliance leak.

When Mold Damage Is NOT Covered

Mold damage typically isn't covered if it's caused by high humidity, lack of maintenance, or any other non-accidental events.

How to Prevent Mold Issues and Improve Coverage

If you live in a house that's prone to mold issues, make sure to use dehumidifiers in damp areas and ventilate those places properly. You can also ask your insurer if they provide any mold-specific endorsements for better protection.

Does Homeowners Insurance Cover Earthquakes?

Standard Policies & Earthquake Exclusions

Most homeowners insurance policies exclude earthquake damage. That means if your home or belongings are damaged during a quake, you most likely won't be protected.

How to Get Earthquake Insurance Coverage

You can buy earthquake insurance as a standalone policy or an endorsement. It usually covers repairs to your home, personal belongings, and temporary living expenses if you're displaced.

Costs and Benefits of an Earthquake Insurance Rider

Earthquake coverage can be pretty expensive, especially in high-risk areas. Plus, it often comes with a high deductible (10—20% of the coverage limit). Still, it's worth considering if you live near a fault line.

Does Homeowners Insurance Cover Water Damage?

What Types of Water Damage Are Covered?

Most policies cover sudden and accidental water damage as long as it's caused by a covered peril. For example, from a burst pipe or a leaking appliance.

When Water Damage Is NOT Covered

Water damage as a result of flooding, neglect, and poor maintenance usually isn't covered by most homeowners insurance policies.

How to Get Additional Coverage for Flooding and Sewer Backup

If you're worried about water damage, look into flood insurance through FEMA's National Flood Insurance Program (NFIP) or private insurers. You can also add sewer line or water backup coverage to your homeowners policy for extra protection.

Does Homeowners Insurance Cover Roof Damage?

Coverage for Storm and Hail Damage

If your roof is damaged by a covered peril like hail, wind, or a fallen tree, your policy will typically help pay for repairs or replacement.

When Roof Damage May Be Denied

Insurers will most likely deny your claim if your roof was already worn out or poorly maintained prior to the damage. They might also reduce your payouts if the roof's age or materials don't meet current coverage standards.

Steps to File a Roof Damage Insurance Claim

Take these steps to file a roof damage insurance claim:

• Document the damage with photos
• Call your insurer to report the claim
• Meet with the adjuster for inspection
• Keep all receipts and claim-related documents

Does Homeowners Insurance Cover Wildfires?

Wildfire Coverage in High-Risk Areas

Most standard homeowners policies do cover wildfire damage, including to the structure, personal property, and temporary housing. That said, coverage may be limited or excluded in high-risk wildfire zones.

How to Protect Your Home with Additional Fire Insurance

If you live in a wildfire-prone area, consider buying a fire insurance endorsement or a separate plan through a state-run FAIR Plan. These could offer you protection if you're denied by private insurers.

What to Do After a Wildfire-Related Insurance Claim

Apart from contacting your insurer as soon as possible, you'll want to document everything and keep a detailed inventory of damaged property. Also be prepared for a home inspection and adjuster visit to verify the claim.

Does Homeowners Insurance Cover Wind Damage?

When Wind Damage Is Covered

Wind damage from storms, tornadoes, and hurricanes is typically covered. However, if you live in a high-risk coastal area, exclusions or separate windstorm deductibles may apply.

Windstorm Insurance Riders for High-Risk Areas

If wind damage isn't fully covered under your policy, you may need a windstorm insurance rider or separate policy, especially in hurricane-prone states.

How to Strengthen Your Home Against Wind Damage

Without proper wind protection, wind-borne debris can do serious damage to your home So, if you haven't already, consider reinforcing your roof and installing storm shutters, especially if you live in a state prone to natural disasters.

Does Homeowners Insurance Cover Plumbing Issues?

When Plumbing Damage Is Covered

Most policies cover sudden and accidental plumbing issues, like a burst pipe that damages your floors or walls. The damage is usually covered, even if the pipe itself isn't.

What Plumbing Issues Are NOT Covered?

Long-term leaks, corroded pipes, or issues due to lack of upkeep are typically not covered. In other words, insurers generally won't help pay for plumbing failures that could've been avoided.

How to Prevent Plumbing Issues and Improve Coverage

Make sure to routinely inspect your pipes, insulate them in cold weather, and address minor leaks as soon as you notice them. You can also ask your insurer about optional water damage endorsements.

Additional Home Insurance Coverage Options

Besides dwelling coverage, homeowners insurance also includes the following coverage:

Personal Property Protection for Belongings

Your possessions are covered from damage or theft under personal property coverage. There are limits to standard personal property coverage depending on your policy and insurance carrier. Usually your limit will be equal to 50% to 70% of your dwelling coverage.

Specialty items like high-end electronics, expensive jewelry, furs, fine arts, firearms, and cash have specific limits.

Your coverage extends to travel as well. So if you bring a covered item on vacation and it's stolen, your homeowners policy can reimburse you for it up to your limit.

Liability Insurance for Accidents and Injuries

Homeowners insurance offers you personal liability protection if someone is injured at your property or sued for damages. Some carriers offer identity theft and cyber protection as part of their personal liability coverage or as add-on riders.

There are limits to standard personal liability coverage depending on your policy and insurance carrier. Basic personal liability homeowners policies typically have a $100,000 coverage limit.

Certain items like a pool or trampoline can increase your liability as a homeowner. Also, some homeowners insurance policies exclude exotic pets and certain dog breeds. Some homeowners insurance companies will not offer coverage based on the size and breed of the dog, especially large dogs and breeds considered to be aggressive.

Loss of Use Coverage for Temporary Living Expenses

"Loss of use" coverage, also known as additional living expenses (ALE), is included in most homeowners policies. It provides reimbursement up to a limit — often 20% or 30% of your dwelling coverage, and for a certain amount of time — for temporary housing when a peril causes damage to your property or belongings that makes your home uninhabitable.

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