As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Written By Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Lead Editor, Insurance Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
| Insurance Writer and Analyst
Updated: Oct 9, 2023, 6:50am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Homeowners insurance is one of the most essential types of insurance. The best home insurance policy provides coverage for some of your biggest assets: your house and all your belongings. But it also covers other types of problems, such as accidental injuries to others and additional living expenses if you can’t live in your home due to a problem like a fire.
Knowing what’s actually covered by homeowners insurance can give you peace of mind—or even prompt you to buy extra coverage.
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.
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:
If you want better coverage for your possessions, ask your insurance agent about an HO-5 or similar types of home insurance policies. (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.
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.
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.
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).
Home insurance covers foundation repairs following sudden and unexpected problems, such as:
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:
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.
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.
Home insurance covers water damage for sudden and accidental problems, such as:
Home insurance does not cover water damage that was due to:
Home insurance covers roof replacement for certain types of problems, such as:
Home insurance won’t cover roof damage for these types of problems:
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. To ensure you have adequate protection, you might want to consider the best jewelry insurance or scheduled personal property coverage.
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.
Common exclusions in a standard homeowners insurance policy include:
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.
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 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 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:
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 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.
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.
