What Does Homeowners Insurance Cover

Fran Majidi
June 10, 2020

What is homeowners insurance and what does it cover? People often get confused about how they can use insurance. Well, if you’re lucky, you won’t use your home insurance at all. And that’s the way it’s designed to work. Homeowners insurance is not the same as a homeowners warranty.

Perhaps a better question would be: What damage does homeowners insurance cover? This is important because earthquakes and floods are explicitly excluded from all homeowners insurance policies. Depending on your policy, other perils may be excluded too.

If you live in an earthquake prone area, it’s important that you buy earthquake insurance, which is sold separately. It’s also wise to buy flood insurance if you live in or near a flood zone. With storms taking extreme turns, this coverage is very important to have because home insurance does not include flooding.

Homeowners insurance is a set of coverages designed to repair or replace your home and belongings but only if they are damaged by specific perils that are listed in your policy. Common perils include fire, theft and water damage not caused by a flood. Also common are damages caused by lightning strikes, windstorms and hail. Unlike a homeowner warranty, you can’t file a claim on a broken stove or refrigerator.

Homeowners insurance also covers liability, meaning that if someone were to get hurt in your home or you caused damage to someone else’s property, you’d be covered for medical costs and legal bills. The following questions and topics will clarify what a home insurance policy typically covers.

Dwelling Coverage

You’ll see a section in your policy called “dwelling coverage.” A dwelling is where you live and this term refers to the structure of the home, including the foundation and roof. When you apply for home insurance, you typically need to give the age of the roof. Insurance companies are very specific about what they do and do not cover when it comes to roof damage protection.

What Does Homeowners Insurance Cover for Plumbing?

A burst pipe may be covered, but it may not be covered, depending on what caused the event and what’s included and excluded in your homeowners insurance policy. You may not always be covered, especially if it’s determined that the pipes were in poor condition due to negligence. Older homes are more expensive to insure due to old systems.

What Does Homeowners Insurance Cover in a Fire?

In the event of a fire, homeowners insurance would cover the cost to rebuild the structure of your home, if the fire destroyed it. Home insurance will also cover repairs and contents, but up to limits. This is why it’s important to revisit your homeowners insurance policy every year, to make adjustments for home improvements and to reconsider an inventory of new big-ticket items that you keep in the home. You may want to consider increasing limits if you’ve added value to your home or contents or you could consider buying an umbrella policy to make sure you have adequate coverage.

What Does Homeowners Insurance Cover in a Flood?

You will not be covered for water damage resulting from ground seepage, water or sewer pipe backups, flooding, and poorly maintained pipes and/or roof. Different insurance companies have different policies but in most cases, damages are inspected for negligent maintenance, which may result in less or no coverage. For example, with flooding caused by a faulty roof, the entire roof will be inspected to see if it should’ve been replaced sooner. If that is the case and you are found to be negligent you may only get partial coverage (if any) for a new roof. This is why it’s important to keep your home in good condition.

For a flood caused by a natural disaster, you’ll need to buy a flood insurance policy, which is sold separately from homeowners insurance.

What Does Liability Insurance Cover with Homeowners?

If your dog bites someone or someone breaks an ankle on your wobbly porch you are protected by the liability insurance portion of your homeowners insurance. If anyone is hurt on your property, this coverage may pay for medical expenses related to the injury. Liability coverage can also be extended if you have assets you want to protect, by buying an umbrella insurance policy. If you have significant wealth or travel abroad regularly, it’s also wise to buy umbrella insurance, which is very inexpensive but can prevent extensive and expensive losses. Your homeowners insurance may also cover legal bills for slander, libel and more. Speak with an agent about the various protections the liability portion of your coverage serves.

What Does Legal Protection on Home Insurance Cover?

Legal protection is usually called liability insurance in homeowners policies. Regardless of the wording, this protection covers legal expenses related to injuries or damages to property relating to your home. See more on this in the question above.

What Does ‘Other Structures’ Cover in Home Insurance?

Most homeowners insurance policies will cover a detached garage as well as a tool shed or fence. However, some do not. If you have several detached structures that you need coverage for, it’s important to read your policy to make sure they are covered. You may need to switch homeowners insurance carriers to do this.

Will Homeowners Insurance Cover Jewelry?

It’s not a matter of whether or not a homeowners insurance policy will cover jewelry but if that policy has high enough limits to cover all your belongings as well as the jewelry. If the personal property protection limits are not high enough, you can buy extended coverage for expensive items. Extended coverage often comes in the form of a rider. For more on insuring your jewelry visit here.

What Does Homeowners Insurance Cover in a Theft?

If your home was burglarized your personal property is covered in the personal property protection portion of your homeowners insurance. If there was damage done during the break in, that may be covered as well. If you had belongings stolen from detached structures, like tools from the shed or garage, you should be covered for these too.

What most people don’t know is that personal property that is stolen outside the home is covered by homeowners insurance as well. For example, if your bag was stolen out of a car or if someone stole your bicycle. Homeowners insurance does not cover car theft. For that you’d need comprehensive auto coverage.

Do take into consideration that you always have to pay the deductible in order to be reimbursed for your losses. Only make a claim on items that are valuable and worth it. Too many claims will raise your rate considering and may possibly cause your insurer to drop coverage altogether.

What Does Hazard Insurance Cover on a Home?

Like “dwelling coverage,” “hazard insurance” is a subsection of a homeowners insurance policy. The hazards listed are the covered perils such as fire, hail or other destructive natural events. It’s important to look at the hazard coverage of your insurance to know exactly what kinds of losses you can expect coverage for and to determine which coverages you need to buy separately.

For instance, floods and earthquakes are never covered in a home policy. These are each sold separately. In states like California, which experiences many earthquakes and areas that are prone to flooding, insurance agents are required to offer insurance for these perils. If your agent has not offered you these coverages, it may be time to find an agent who has you covered.

What Does Home Building Insurance Cover?

Home construction insurance is important if you’re building a home. It’s sometimes called home building insurance. You need to be protected from the time you start working on the foundation of a home. If anyone gets hurt while on a construction site, it’s on you. Don’t assume that the builder is adequately insured for mishaps that may occur. With that said, make sure that your contractor has the appropriate contractor’s insurance before he begins work. Builder’s risk insurance covers the theft and vandalism of tools, material and equipment being used to build the house.

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