Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Mar 19, 2020

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How Home Insurance WorksYou need to know how homeowners insurance works if you own your own home. Homeowners insurance protects you from a variety of possible financial losses that may occur as a result of owning a home.

Home insurance pays you to repair or replace your home when damage or destruction occurs. It provides protection for the damage, destruction or theft of your personal belongings.

The liability portion covers medical costs for anyone who is hurt on your property and will help keep you from being sued. In the case of being sued, it will pay for your legal defense and the what you are deemed liable for to the limit of your policy.

To learn even more about how home insurance works in practice then continue through this article and when you are finished why not use the free home insurance quote finder above to compare home insurance rates from many top insurance providers?

Perils that are Covered by Homeowners Insurance

There are multiple different types of homeowners insurance policies on the market today. Most people carry a standard policy for their primary residence, especially if they still have a mortgage on it. The different homeowners insurance policies can cover a wide variety of perils. However, the typical policy will cover the following perils:

  • Theft
  • Fire
  • Lightning
  • Smoke
  • Glass Breakage
  • Vandalism
  • Damage caused by vehicles or aircraft
  • Volcanic eruption
  • Hail
  • Windstorm
  • Falling Objects
  • Civil commotion or riot

In addition, personal liability, another peril, is covered by homeowners insurance. It provides protection from legal obligations that may arise from things that occur on your property or through the actions of you, your spouse, your children or even your pets.

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Homeowners Insurance Covers the Little Details

Your homeowners insurance policy will provide you with coverage for multiple extras that many people never even think about when it comes to insurance.

Homeowners insurance gives you coverage for temporary lodging while your home is unlivable, following one of the perils covered by the policy. This will take care of things such as hotel rooms, if you have to vacate your home for safety reasons or while repairs are being made. Such additional living expenses are often up to 20% of the amount your home is covered for.

When you are the victim of a car burglary, the only things that are covered by your comprehensive car insurance are those things that are attached to the car. Personal belongings which are stolen from the vehicle are covered by your homeowners insurance.

Clean-up outside your home following a covered loss is another of the little details that your homeowners insurance will cover. Removal of fallen trees, debris and damaged property is covered.

Identity theft and credit card loss are also covered by your homeowners insurance.

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What Homeowners Insurance Does NOT Cover

While homeowners insurance is meant to protect you from financial loss in the case of the unexpected, there are still things that are not covered. Many of these fall into the category of the unexpected, but for a variety of reasons they are excluded from regular homeowners insurance coverage.

Homeowners insurance will not pay for:

  • Renovations or regular maintenance on your home.
  • Intentional damage done to your home by one of the homeowners.
  • Damage that is the result of pests and pets.
  • Damage due to neglect.
  • Sewage problems, such as backups and resulting mold.
  • The belongings of any tenants in your residence.
  • Nuclear hazards.
  • Many geological events such as landslides, volcanic eruptions, mud slides, surface water, mine subsidence, sinkholes and expansive soils.
  • Flooding and earthquakes; but you may purchase separate policies to cover these things.

In addition to those listed above you should note the following. While storm damage, including hurricane damage, is included under your policy, if you live in hurricane prone areas, there may be a limitation to the coverage you have. If hurricanes concern you, it is important to be aware of the coverage you have for them.

Essentially, with homeowners insurance you take out a policy to protect your home and possessions. You pay a yearly premium to the insurance company in exchange for them assuming the risk for numerous perils that could cause you financial loss. If one of these perils does occur, you make a claim to the insurer and it will pay out to indemnify you.

Even renters can benefit from taking out a specific renters insurance policy that will cover just their belongings, as opposed to the structure of the home.

Homeowners Insurance Rate Quotes Online

When you are looking for new homeowners insurance, you can make the process quick and easy by using our online quote tool. After you answer questions about yourself, your home and your insurance needs, your information is submitted to a variety of insurers. Before you know it you will have a multitude of quotes to compare and choose from. Start now and protect your home today!