What Does Homeowners Insurance Cover?

Q: Does homeowners insurance cover lightning strikes?

Lightning strikes are regarded as insured perils , and damage from them is typically covered by standard homeowners insurance plans. In the event that lightning strikes your home, protection offers complete assistance through additional living expenses, personal property coverage and dwelling coverage.

Q: Does homeowners insurance cover septic tanks?

Septic tanks are covered by standard homeowners insurance , but only if the damage is caused by an insured danger, such as fire or theft. Note that insurance will not cover replacement or repair costs if the policyholder's negligence caused the damage.

If a sudden or accidental event damages your property, homeowners insurance typically covers the cost of repairing or rebuilding your home, repairing or replacing your belongings, living expenses if you are temporarily displaced and liabilities if someone is injured on your property. Most claims involve natural disasters, theft and accidents.

Let’s say a storm hits your city. If you have sufficient homeowners insurance coverage, your policy could pay for the damages caused by wind and hail. However, insurance has limitations. While homeowners insurance may pay for wind and hail damage, it might not compensate you for damages resulting from uncovered causes, like flooding or earthquakes.

TABLE OF CONTENTS

What Homeowners Insurance Covers
Common Additional Coverages for Home Insurance
What Perils Homeowners Insurance Covers
What Homeowners Insurance Doesn't Cover
FAQ

Key Takeaways

Home insurance covers the cost of repairing or replacing your home and belongings after damage from covered events.

Homeowners insurance also provides liability protection if someone is injured on your property or if you cause damage to others' property.

Temporary living expenses are covered by homeowners insurance if you need to relocate due to a covered loss, ensuring your lifestyle is maintained.

What Homeowners Insurance Covers

Homeowners insurance covers the costs of repairing or replacing your home and belongings if certain events like fire, theft or natural disasters damage them. It also offers protection against liability if someone is injured on your property.

Understanding these aspects of home insurance coverage will help you gauge how much home insurance you need. Here’s a quick look at the standard homeowners insurance coverages:

Coverage Type	Description
Dwelling Coverage (Coverage A)	Covers repairs or rebuilding of your home’s structure, including walls, plumbing and electrical systems.
Other Structures Coverage (Coverage B)	Covers repairs or replacement of separate structures on your property, like sheds or fences, up to 10% of your dwelling limit.
Personal Property Coverage (Coverage C)	Covers the cost of damaged or stolen personal items like furniture, electronics and clothing.
Loss of Use Coverage (Coverage D)	Covers extra living expenses if you need to relocate temporarily, like dining out and lost rental income.
Personal Liability Coverage (Coverage E)	Protects against financial responsibility if someone is injured or their property is damaged on your premises.
Medical Payments Coverage (Coverage F)	Covers medical expenses if someone is injured on your property, regardless of fault.

Dwelling Coverage (Coverage A)

Dwelling coverage in homeowners insurance protects the cost to repair or rebuild your home if it's damaged by a covered peril. It safeguards the physical structure of your home, including the walls, roof and foundation.

This home insurance coverage is essential for ensuring the restoration of your home to its original condition after a loss. Without sufficient dwelling coverage, you could be left paying out-of-pocket for significant repairs or a total rebuild.

While these can vary from policy to policy, these are the parts of your home that dwelling coverage covers:

Walls: This coverage protects your home's interior and exterior walls.
Roof: Dwelling coverage pays for damage to roofing materials and structure.
Floors: This includes protection for various types of flooring, such as hardwood, tile or carpet.
Foundation: The structural foundation of your home is insured.
Windows and doors: This includes damage to windows, doors and frames.
Built-in cabinetry: Dwelling coverage protects fixed cabinetry, including kitchen cabinets and built-in shelving.

Other Structures Coverage (Coverage B)

In homeowners insurance, other structures coverage pays to repair or replace the structures on your property that are not attached to your primary dwelling, like detached garages or fences. This coverage protects these additional structures from potential damages, ensuring comprehensive home insurance coverage. Some examples of other structures that home insurance covers include:

Detached garages: This coverage includes standalone garages, carports or even workshops that are separate from your main house.
Fences: Fences of all types, such as wood, vinyl or metal, that enclose or enhance your property are protected under this coverage.
Sheds or storage buildings: Any sheds or storage units, whether used for gardening tools or seasonal items, are also covered.
Guest houses: Detached guest houses or in-law suites on your property are included, offering protection for these additional living spaces.
Gazebos: Outdoor structures like gazebos or pergolas are covered, safeguarding spaces designed for relaxation and entertainment.
Driveways: Your driveway is protected against damage from natural causes or accidents, ensuring the integrity of this essential part of your property.

Personal Property Coverage (Coverage C)

Beyond the foundation and overall structure of your home, your personal belongings are also covered by homeowners insurance under personal property coverage. For instance, if your appliances or furniture become damaged due to an unexpected fire, your home insurance policy will pay to repair or replace what got lost in the damage.

Some examples of personal belongings covered by homeowners insurance include:

Furniture: This coverage protects items like sofas, beds, dining tables and chairs.
Electronics: Coverage includes devices such as televisions, computers, smartphones and home entertainment systems.
Clothing: All your clothing, from everyday wear to special occasion outfits, is covered in the event of damage or theft.
Appliances: Home appliances like refrigerators, washing machines and microwaves are included in your coverage.

HIGH-VALUE ITEMS MAY NEED ADDITIONAL COVERAGE

While personal property coverage in homeowners insurance covers your belongings, high-value items like expensive jewelry or fine art may exceed standard coverage limits. Consider adding a scheduled personal property endorsement to your policy to ensure these valuables are fully protected.

Replacement Cost Value (RCV) vs. Actual Cash Value (ACV)

Home insurance can cover your belongings in one of two ways: actual cash value (ACV) or replacement cost value (RCV). ACV reimburses you for the current value of your items, factoring in depreciation, while RCV covers the full cost of replacing your items with new ones of similar kind and quality. For example, with ACV, if your five-year-old TV is damaged, you would receive the amount it's worth today, whereas, with RCV, you'd be compensated enough to buy a new TV of a similar make and model.

By default, dwelling coverage is reimbursed based on RCV, while personal property coverage is reimbursed by ACV. However, some providers may offer the option to upgrade your personal property coverage to RCV for an additional premium.

Loss of Use Coverage (Coverage D)

Loss of use coverage in home insurance, also known as additional living expenses (ALE), reimburses you for temporary living expenses if your home is uninhabitable because of a covered peril. During the process of repairing or rebuilding your home, this coverage ensures you can maintain your standard of living.

Here’s what homeowners insurance covers under loss of use:

Temporary housing: The cost of renting an apartment, hotel stays or other temporary accommodations is covered.
Increased living expenses: Additional expenses like higher grocery bills or laundry services due to displacement are included under loss of use coverage.
Transportation costs: If your temporary housing is farther from work or school, loss of use coverage may cover the extra transportation costs.
Storage fees: The costs of storing your belongings while your home is being repaired are covered by homeowners insurance.

Personal Liability Coverage (Coverage E)

Personal liability coverage is a homeowners insurance coverage that protects you financially if you're found legally responsible for causing injury to someone else or damaging their property. This coverage not only pays for legal fees if you’re sued, but it also covers the cost of settlements or judgments against you up to the limits of your policy. Essentially, it provides a safety net that helps ensure your personal assets aren't drained due to unexpected incidents that lead to legal action.

For example, if your dog accidentally bites a guest or someone slips and falls on your property, home insurance coverage would cover their medical expenses and any legal costs if they decide to sue. Additionally, your coverage may pay for the repairs or replacement if your child accidentally damages a neighbor's expensive garden feature.

Medical Payments Coverage (Coverage F)

If someone gets injured on your property, medical payments coverage in home insurance pays for the related expenses regardless of who is at fault. Unlike personal liability coverage, this is designed to handle smaller claims and help avoid potential lawsuits by covering medical bills for guests who may slip, trip or suffer another minor injury while visiting your home. This coverage includes costs for first aid, hospital visits or even necessary surgeries due to injuries sustained on your property.

What Else Does Homeowners Insurance Cover?

Does homeowners insurance cover animal damages?

Homeowners insurance will pay for animal damage as long as it is determined which animal caused the damage and to what extent. Remember that covered animal damage does not apply to your pets — only to wild animals.

Does homeowners insurance cover electrical panel replacement?

Homeowners insurance covers electrical panels damaged by unforeseen events like fires or storms. Ensure regular maintenance and code compliance for continued coverage, especially if your panel is over 20 years old.

Does homeowners insurance cover foundation leaks?

Home insurance generally covers foundation leaks only if they result from a covered peril listed in your policy, such as sudden and accidental damage to plumbing, heating or air conditioning systems.

Does homeowners insurance cover jewelry?

A standard homeowners insurance policy pays for lost and stolen jewelry. You can file a claim on losses that involve theft or peril. For instance, special personal property insurance might pay for your stolen jewelry if someone breaks into your house and steals your belongings. Basic coverage for jewelry is relatively low, so you may want to purchase additional coverage for pieces with precious stones and metals.

Does homeowners insurance cover pet damage?

Pet damage is covered by homeowners insurance — if your pet damages someone else’s belongings, the policy’s personal liability component covers it. However, damage to your own property caused by your pet is usually excluded.

Does homeowners insurance cover water damage?

Homeowners insurance covers water damage from covered perils under dwelling coverage, but not floods. Sewer backup and hidden water damage usually require endorsements. To protect against flood damage, you need separate flood or difference in condition (DIC) insurance, which few insurers offer.

Does homeowners insurance cover plumbing repairs?

Homeowners insurance covers plumbing repairs when the damage results from sudden or accidental events, like a fire or burst pipe. However, it typically won’t cover issues caused by wear and tear or lack of maintenance. Regular inspections and proactive maintenance are crucial to avoid risks not covered by standard policies.

Does homeowners insurance cover lightning strikes?

Lightning strikes are regarded as insured perils, and damage from them is typically covered by standard homeowners insurance plans. In the event that lightning strikes your home, protection offers complete assistance through additional living expenses, personal property coverage and dwelling coverage.

Does homeowners insurance cover damage caused by a contractor?

In certain cases, homeowners insurance will pay for contractor-caused damage to the property while doing their work. Coverage, however, frequently varies based on the incident's details and your insurance policy.

Does homeowners insurance cover septic tanks?

Septic tanks are covered by standard homeowners insurance, but only if the damage is caused by an insured danger, such as fire or theft. Note that insurance will not cover replacement or repair costs if the policyholder's negligence caused the damage.

Does homeowners insurance cover roof leaks?

Homeowners insurance typically covers roof leaks caused by a named peril. However, it won’t cover leaks resulting from wear and tear, pests, mold or lack of maintenance.

Does homeowners insurance cover hurricane damage?

Standard policies cover hurricane damage to your home's structure, other structures and personal property coverage. However, most policies do not cover water damage caused by flooding or storm surges from a hurricane, so separate flood insurance is needed for full protection.

Does homeowners insurance cover furnace replacement?

Your homeowners insurance policy will cover the cost of furnace replacement or repair if it is damaged due to a covered risk, like a fire or vandalism. Your A/C, vents and the remainder of your HVAC system are also covered.

Does homeowners insurance cover termites?

Homeowners insurance typically does not cover termite damage as it is considered a preventable maintenance issue. Termite damage is seen as the result of neglect rather than a sudden, unforeseen event.

Does homeowners insurance cover slab leak repair?

Slab leak repairs may be covered by homeowners insurance if the leak is caused by a sudden, accidental event, like a burst pipe. However, coverage is unlikely if the leak is due to poor maintenance or gradual wear and tear.

Does homeowners insurance cover leaking pipes?

Homeowners insurance generally covers damage from leaking pipes if the leak is sudden and accidental. However, if the leak is due to a lack of maintenance, the repairs to the pipe itself might not be covered.

Does homeowners insurance cover tree removal?

Homeowners insurance may cover tree removal if the tree falls due to a covered peril, such as a storm or fire, and damages your home or blocks a driveway. Routine tree removal without any associated damage is usually not covered.

Does homeowners insurance cover asbestos removal?

Homeowners insurance generally does not cover asbestos removal, as it is considered a maintenance issue and not a sudden loss. If asbestos is disturbed during a covered event, such as a fire, the cleanup might be covered.

Does homeowners insurance cover mold?

Mold damage is typically covered by homeowners insurance if it results from a covered peril, like water damage from a burst pipe. However, if the mold is due to neglect or poor maintenance, it’s unlikely to be covered.

Does homeowners insurance cover dog bites?

Homeowners insurance usually covers liability for dog bites under the personal liability portion of the policy. However, coverage can vary depending on the breed of the dog and the specific policy terms.

Common Additional Coverages for Home Insurance

In addition to standard home insurance coverages, homeowners can add endorsements or additional coverages to their policy, such as scheduled personal property or cyber event and ID theft protection. These optional policy enhancements provide extra protection tailored to specific risks or valuable items not fully covered under a standard policy.

Below is a list of common home insurance endorsements, each offering distinct benefits to help safeguard your home and assets.

Earthquake Coverage

Specifically covers damage to your home and belongings caused by an earthquake, which is typically excluded from standard home insurance policies.

Flood Insurance

Covers damage to your home and belongings caused by flooding, which is not included in a standard homeowners policy and often requires a separate policy through the National Flood Insurance Program (NFIP) or a private insurer.

Backup of Sewer or Drain

Covers water damage caused by the backup of your sewer or drain or a sump pump failure, which is typically not included in standard home insurance policies.

Scheduled Personal Property

Provides greater coverage for valuables that exceed the limits of your standard personal property coverage, such as jewelry, fine art or collectibles. This endorsement ensures these items are covered for their full value.

Cyber Events and ID Theft

Protects against the financial losses associated with identity theft or cybercrime, including expenses related to restoring your identity, legal fees and sometimes even ransom payments in the case of cyber extortion.

Ordinance or Law Coverage

Covers the additional costs required to bring your home up to current building codes or ordinances after a covered loss. This is particularly useful if your home is older and existing codes have changed since it was built.

Extended Replacement Cost

Provides additional coverage beyond your policy’s limit if the cost to rebuild your home after a covered loss exceeds the dwelling coverage amount, often due to increased construction costs or demand.

Green Home Coverage

Covers the additional costs of using environmentally friendly materials and products if your home needs to be repaired or rebuilt after a covered loss, supporting a more sustainable rebuild process.

What Perils Homeowners Insurance Covers

Homeowners insurance is designed to cover sudden and accidental incidents, such as a fire or theft. MoneyGeek has compiled a table highlighting different damages and perils to help you identify what’s covered.

Items marked “No” mean that you’ll likely need additional coverage, while items marked “Yes” mean they are typically included in standard policies. Those marked “Sometimes” can depend on the insurer, as they can sometimes be included to a certain extent or need an additional policy.

Standard Homeowners Insurance Policy Coverages	Covered (Yes/No/Sometimes)
Asbestos Removal	Sometimes
AC Units	Yes
Additional Structures	Sometimes
Bodily Injuries	Yes
Earthquakes	No
Electrical Panel Replacement	Sometimes
Fallen Trees	Sometimes
Fences	Yes
Fire	Yes
Flooded Basements	Sometimes
Floods (Natural Disasters)	No
Foundation Repair	Sometimes
Hail	Yes
Hurricanes	Sometimes
Items in Storage Units	Yes
Jewelry	Sometimes
Landscaping	Yes
Landslides and Mudslides	No
Lighting	Yes
Mold	Sometimes
Pet Damage	Sometimes
Roof Leaks	Sometimes
Septic Tanks	Yes
Sewer Line Replacement	Sometimes
Slips and Falls	Yes
Structural Damage	Yes
Swimming Pools	Yes
Termites	No
Theft	Yes
Trampolines and Tree Houses	Sometimes
Vandalism	Yes
Water Damage	Sometimes
Wild Animal Damage	Sometimes
Wild Fire	Yes
Windstorm	Yes

What Homeowners Insurance Doesn't Cover

Homeowners insurance doesn't cover damage from floods, earthquakes, routine wear and tear or mold and rot. These exclusions often require separate policies or specific endorsements for protection, as they involve risks that are either gradual, preventable or severe enough to necessitate additional coverage.

Flood Damage

Standard homeowners insurance does not cover damage caused by flooding, which includes water from rising rivers, storm surges or heavy rainfall. Flooding is considered a high-risk event that requires a separate flood insurance policy, often available through the National Flood Insurance Program (NFIP) or private insurers.

Earthquake Damage

Damage caused by earthquakes is another exclusion from most standard policies. Earthquakes can cause significant structural damage, and due to the unpredictable and severe nature of these events, you must purchase separate earthquake insurance to ensure protection.

Wear and Tear or Maintenance Issues

Homeowners insurance is designed to cover sudden and accidental damage, not the gradual deterioration of your home due to normal wear and tear or poor maintenance. Issues like roof leaks due to old shingles or plumbing problems from neglected pipes are considered the homeowner's responsibility to prevent and repair.

Mold and Rot

Mold and rot are typically excluded unless they result from a covered peril, like a burst pipe. Because mold and rot usually develop over time and can often be prevented through regular home maintenance, they are generally not covered by standard homeowners insurance.

FAQ

We answered some common questions about homeowners insurance to help you make the best decisions about your coverage.

What are the types of homeowners insurance?

The different types of homeowners insurance include HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7 and HO-8, although homeowners typically get HO-3 or HO-5. HO-4 only applies to condo and apartment units.

Can you switch your homeowners insurance provider?

You can switch insurance providers any time you want. Just note that some companies might charge cancellation fees if your policy hasn’t ended yet.

Can you keep extra money from an insurance claim?

If you’ve paid all your premiums yet you still have a few dollars left from your insurance benefits, you can pocket the difference. Just make sure you didn’t overinflate your claim. Either way, insurers have rigid claims processing departments, so you likely won’t get any leftovers. If anything, you might have to shoulder some expenses yourself.

What is the difference between homeowners insurance and property insurance?

Homeowners insurance is a type of property insurance and only covers detached houses. You’ll need another type of property insurance for condominium units, apartments, mobile homes, commercial properties and row houses, among other structures. Property insurance encompasses flood and earthquake insurance.

What are the negatives of making a house insurance claim?

Your premiums will increase if you keep filing claims. In the worst case, your insurer might not renew your policy. Remember: insurance companies lose money on claims. They would rather focus resources on client acquisition instead of insuring high-risk, non-insurable policyholders.

Does homeowners insurance cover tree damage to your neighbor’s property?

Homeowners insurance often covers tree damage on a neighbor's property under certain conditions. If a healthy tree from your property falls due to events like storms, your neighbor's policy usually covers it. However, it may be your responsibility if the tree is a known hazard or damaged.

About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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