What Is And Isn’t Covered by My Home Insurance Policy?

Homeowners insurance provides property damage coverage for your home and belongings if they are damaged by certain perils, like fire or vandalism, plus personal liability coverage if you’re responsible for another person’s losses. However, not all losses are covered, with damages caused by earthquakes, floods and mold being common exclusions.

Read below to see what types of coverage homeowners insurance can provide and what events are most likely to not be covered.

Key Takeaways Standard homeowners insurance covers common perils, like fire, theft, vandalism and windstorms. Homeowners insurance includes liability coverage in case you injure someone or damage their property. Floods, earthquakes, mold and identity theft are commonly excluded from coverage. Homeowners can buy policy endorsements to expand their protection.

What Does Homeowners Insurance Cover?

Standard homeowners insurance policies include six types of coverage: dwelling, additional structures, personal property, loss of use, personal liability and medical payments. The purpose of these coverage types is to help you avoid bearing the full financial burden any time unexpected accidents occur.

Dwelling Coverage

Dwelling coverage, or Coverage A, protects the physical structure of your house itself, along with connected structures like garages and fixtures like plumbing, heating and air conditioning systems. It is recommended that you buy enough dwelling coverage to cover at least 80% of the cost of replacing your home but your insurer may require coverage that provides 100% of its replacement cost.^[1]

Insurance will cover your dwelling’s structure for damages caused by the below 16 perils plus all perils not specifically excluded in your policy. This is called open perils coverage.

Fire or lightning	Theft
Windstorm or hail	Volcanic eruptions
Explosion	Falling objects
Riot or civil commotion	Weight of ice, sleet or snow
Damage by aircraft	Water/steam discharge from home systems and appliances
Damage by vehicle	Sudden/accidental tearing, cracking, burning or bulging of home systems
Smoke	Freezing of home systems
Vandalism or malicious mischief	Sudden/accidental power surges

Additional Structures Coverage

Additional structures coverage, also called other structures coverage or Coverage B, covers structures on your property not directly attached to your house, such as a shed, fence or in-ground swimming pool. Standard home insurance policies typically set your additional structures coverage limit at 10% of your dwelling coverage limit.^[1]

Personal Property Coverage

Personal property coverage, or Coverage C, insures the personal belongings within your home, including electronics, furniture, clothing and more. If your claim is approved, your insurer will reimburse your losses at the item’s actual cash value, which deducts for depreciation.

Unlike dwelling coverage, your personal belongings are covered on a named peril basis.

This means only those perils specifically listed in your policy are covered — fortunately, a standard policy will cover the 16 perils listed above.

Generally, your personal property coverage limit will be between 50% and 70% of your dwelling coverage limit. You may also have off-premises coverage, insuring your belongings even if they are not in your primary residence, although the limit for this is usually 10% of your overall personal property coverage limit.^[2]

Loss of Use Coverage

Loss of use coverage, also known as additional living expenses coverage or Coverage D, takes care of temporary living costs if your primary residence is damaged to the extent that it becomes uninhabitable. Covered expenses can include hotel stays, restaurant meals, storage costs and more.

Loss of use coverage only takes effect if you exceed the amount of money you would normally spend on living expenses, such as groceries and your mortgage payment. Your loss of use coverage limit will often be 20% of your dwelling coverage limit.^[1]

Personal Liability Coverage

Personal liability coverage, or Coverage E, kicks in if you or someone in your household is held liable for injuring someone else or damaging their property. This type of coverage can pay for medical bills and lost wages if a guest slips and hurts themselves on your property, or it can pay for property repairs if a tree falls from your yard and damages your neighbor’s house. In addition, personal liability coverage can pay for legal expenses if a property damage or bodily injury claim escalates into a lawsuit.

Personal liability coverage generally applies to all relatives living in your household. Many providers will also insure children living outside of your home, although they may have age restrictions. For example, Nationwide offers coverage for students who are away at school as long as they are younger than 26.^[3]

While most homeowners policies automatically provide $100,000 worth of personal liability coverage, it is recommended that you purchase a policy that will provide between $300,000 and $500,000 for personal liability.^[4]

Medical Payments Coverage

Medical payments coverage, or Coverage F, can also cover medical bills, although only for relatively minor injuries. Typical policies only provide up to $5,000 for medical payments.^[5] However, medical payments coverage kicks in even if you are not liable for the other person’s injury. While it won’t cover legal expenses, it can help prevent a minor claim from escalating into a costly lawsuit.

Endorsements Can Expand Your Coverage

Regardless of your policy type, you can purchase an endorsement, or insurance rider, to update the terms of your policy, potentially adding more comprehensive coverage in exchange for paying a higher premium.

Common endorsements you can use to add to your homeowners insurance coverage include:

• Scheduled property coverage: In general, expensive items like furs, jewelry and antiques carry a sublimit, meaning your insurance company will only cover them up to a percentage of your overall personal property coverage limit. However, scheduled property coverage allows you to insure valuables at their replacement cost value.
• Water backup coverage: While flood insurance will cover water damage from natural causes, you will need additional coverage to take care of damage caused by backed-up drains, sump pumps and sewer lines.
• Ordinance or law coverage: This type of coverage can help you bring your property up to your local building codes.
• Home-based business insurance: If you operate a home-based business, you may need commercial property insurance to cover items in your house that are associated with your business.
• Service line protection: With service line protection, you can more easily pay for repairs to service lines you are responsible for, like water and electric lines.
• Identity fraud coverage: If your identity is stolen, an identity theft endorsement may provide you with compensation to cover legal fees, lost wages and other associated costs.

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What Doesn’t Homeowners Insurance Cover?

Homeowners insurance policies will always include a list of exclusions — perils that your insurance company will not cover.

Floods and Earthquakes

Homeowners insurance doesn’t cover damage caused by floods or earthquakes. While your home insurance policy may account for water damage from a burst pipe within your own home, it likely won’t account for flooding from external causes like heavy rain, an overflowing river or a sewer backup. In addition, most types of ground movement are generally excluded, including sinkholes and landslides.

You can usually purchase additional coverage to protect yourself from earthquake and flood damage.

If you live in a state that is prone to these kinds of perils, your insurance company may even be legally required to offer you extra insurance. For example, companies in California have to offer optional earthquake insurance to customers.^[6]

Wear and Tear

Your insurance company won’t cover damage that happens due to predictable wear and tear or aging. Home insurance policies are designed to give you financial support if you need to make significant repairs after a sudden and unexpected accident. Conversely, regular upkeep and maintenance of home systems and appliances is generally your responsibility and you will have to pay for these out of pocket as a result.

Although your home insurance won’t take care of minor repairs, you could cover them by purchasing a home warranty. After selling you a warranty, a home warranty company will generally take care of repairing or replacing microwaves, refrigerators, washers, dryers, heating and air conditioning systems and more as necessary, usually within a one-year period.

Other Exclusions

Additional perils that usually aren’t covered by homeowners insurance include:

• Intentional loss
• Government confiscation or condemnation of property
• Nuclear hazard
• War
• Pests and infestations
• Mold
• Dog bites by certain breeds
• Ordinance and failure to meet local building codes and standards
• Identity theft
• Losses incurred while operating a home-based business

As with flood insurance and earthquake insurance, you can usually purchase add-ons to your insurance policy that will cover these exclusions. As a result, it’s possible to make sure you are taken care of even if you face a peril that otherwise isn’t covered by your homeowners insurance.

Types of Home Insurance Policies

There are eight types of homeowners insurance policies, also known as forms, ranging from HO-1 to HO-8. However, for the majority of homeowners, the most relevant types are HO-1, HO-2, HO-3 and HO-5. Keep reading for a brief overview of each policy type.

Type	Description
HO-1 (Basic Form)	Protects against only 10 perils
HO-2 (Broad Form)	Protects against 16 perils on a named peril basis
HO-3 (Special Form)	Considered standard coverage; offers dwelling coverage on an open peril basis and personal property coverage on a named peril basis
HO-4 (Contents Broad Form)	Also known as renters insurance, protects against 16 perils but doesn’t include dwelling or additional structures coverage
HO-5 (Comprehensive Form)	Offers dwelling and personal property coverage on an open peril basis
HO-6 (Condo Insurance Form)	Protects the condo owner’s personal belongings and the structure of their unit but not the overall building structure or common areas
HO-7 (Mobile Home Form)	Offers dwelling coverage for manufactured and mobile homes on an open peril basis and personal property coverage on a named peril basis
HO-8 (Modified Coverage Form)	Intended for old/historic homes, provides limited coverage against 10 perils

HO-3 policies are the most commonly sold type of homeowners insurance because they meet the insurance coverage standards required by most mortgage lenders. Of course, an HO-3 policy is not all-encompassing, so if you have HO-3 insurance, you still may have to pay for repairs out of pocket after certain perils.

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