What does home insurance cover?

Home insurance may seem confusing, but homeowners insurance coverage is not difficult to understand. Buying home insurance helps homeowners if their house or property is damaged. With a home insurance policy, your home, its contents, and other structures on your property will be repaired or replaced after a covered event. 

When searching for home insurance coverage, you may be wondering — what does home insurance cover? You should consider both your dwelling and surrounding property when deciding whether you need additional coverage options. For instance, some homeowners purchase flood coverage since flood damage is not covered under a typical home insurance policy.

Once you know what you want in your home insurance policy, you should find and compare quotes from several insurance companies. Doing so will help you determine which one offers cheap homeowners insurance coverage in your area. 

What Home Insurance Covers

A standard homeowners insurance policy includes six types of coverage including:

• Dwelling coverage
• Coverage for other structures
• Personal property insurance
• Loss of use coverage
• Personal liability insurance
• Medical payments

The six coverages listed above help with many things about being a homeowner.

Dwelling Coverage

Dwelling insurance covers your home and any structures attached to your home, like a deck or a porch. With dwelling coverage, your insurance provider will pay enough to rebuild your home.

Dwelling coverage typically works in the following scenarios:

• Fire 
• Lightning
• Windstorms
• Hail
• Explosions
• Theft and vandalism
• Damage from ice, snow, and sleet
• Sudden damage from a power surge
• Volcanic eruptions
• Falling debris
• Water overflow or discharge from plumbing, air conditioning, and appliances
• Riots
• Damage from aircraft
• Damage caused by vehicles

For example, home insurance covers smoke damage in most scenarios, but you can check your policy details if you’re unsure about your coverage. 

Coverage for Other Structures

Homeowners insurance covers detached structures on your property. These can include a shed, a detached garage, and even fences. Home insurance policies vary in terms of the coverage they offer for this insurance, but many providers offer coverage at around 10% of what the home is worth.

Personal Property Insurance

With personal property insurance, your homeowners insurance policy will pay to repair or replace damaged or stolen belongings. Most policies offer personal property insurance worth anywhere from 50% to 70% of the home’s value. 

Loss of Use Coverage

With loss of use coverage, your insurance provider will pay for your temporary living expenses if you vacate your home during repairs following a covered event. Most providers offer loss of use coverage worth around 20% of the value of your home and property. 

Personal Liability Insurance

The personal liability portion of your home insurance policy protects you if you unintentionally injure someone or damage someone else’s property or because of neglect. With personal liability coverage, you can choose an amount of coverage anywhere from $100,000 to $500,000. The amount you choose for personal liability can impact the average cost of home insurance. 

Medical Payments

Medical payments will cover medical bills and treatments associated with a covered event. For example, if someone is injured on your property, medical payments will cover the costs associated with that individual’s recovery. Medical payments coverage is similar to personal liability coverage in that homeowners can choose their amount of coverage. 

Read more: What is the average cost of homeowners insurance?

What Home Insurance Doesn’t Cover

While homeowners policies provide coverage for many scenarios, there are plenty of things a standard policy does not cover. Some of the things not covered under a typical home insurance policy include:

• Earthquakes
• Sinkholes
• Floods
• Sump pump overflow
• Termites
• Insect damage
• Bird or rodent damage
• Rust, rot, or mold
• Wear and tear
• Damage from war or nuclear hazards
• Identity theft

Certain exclusions listed above may not apply if you’ve added coverage to your home insurance policy to cover them. For example, you can purchase flood insurance in addition to your standard home insurance policy to ensure your home is covered if there’s ever a flood in your area.

If you’re curious whether home insurance covers roof leaks and other issues, the answer depends on how the damage occurred. If the damage that caused a roof leak was sudden, like a fallen tree, your home insurance policy would cover repairs. However, if the damage was caused by general wear and tear, you may have to pay for repairs yourself.

In addition, most home insurance policies offer limited coverage for the following:

• Boats, jet skis, and other watercraft
• Valuable property
• Firearms
• Jewelry

Read more: Does Auto Insurance cover rodent damage?

If you have a home insurance policy offering actual cash value (ACV), you may find that the replacement cost of certain items in your home is higher than what your policy pays if those items get damaged. If possible, buy home insurance that offers replacement cost coverage rather than ACV coverage. The best policy will help you stay protected in virtually all scenarios.

How to Choose the Best Home Insurance Policy

You need to know what home insurance covers and the type of coverage you want for your home before you shop for the best home insurance policy. If you want a standard policy, you may have more options, and your rates will be cheaper. Still, many homeowners need added protection with additional coverages.

Once you know what you need, you can find and compare home insurance quotes online. You can also see what smaller, regional insurance providers have to offer. For example, Magnum is an A+ Better Business Bureau rated company providing insurance for residents of Illinois and Indiana. You can see our Magnum homeowners insurance review for details.

Comparing quotes from at least three insurance providers will help you save money on coverage without sacrificing the type of insurance you have for your home. In addition, when you compare quotes, you can learn which providers offer the most affordable home insurance near you.