Homeowners insurance ensures you’re covered in the event you undergo a home-related loss.
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There are three components to homeowners insurance: dwelling coverage, personal property, and personal liability.
Additionally, homeowners insurance provides loss of use if you need to temporarily relocate.
Damage to your home or personal belongings by a named event is covered.
Compare homeowners insurance quotes with Policygenius.
A home is the biggest asset most Americans have. Homeowners insurance offers protection for the home and personal possessions. Although homeowners insurance is not required by law, if you have a mortgage your lender will require homeowners insurance to protect the home. If you live in a disaster-prone area, you may need additional coverage.
What is homeowners insurance?
Homeowners insurance protects you from financial hardship should you experience a home-related loss. A standard homeowners insurance will cover your dwelling, your personal belongings, and offers personal liability coverage for injuries that happen on your property. Additionally, homeowners insurance provides “loss of use” in the event you need to temporarily relocate because your home is unlivable.
Damage to your home and belongings must be from “insurance perils.” A peril refers to a specific event that caused damage to your home and belongings.
Common insurance perils are:
Fire or lightningWindstorm or hailExplosionRiotsAircraftVehiclesSmokeVandalismTheftFalling objectsWeight of ice, snow, or sleetAccidental discharge or overflow of water or steamSudden and accidental tearing, cracking, burning, or bulgingFreezingSudden and accidental damage due to short-circuitingVolcanic eruption
The table below are coverages included in a standard homeowners insurance policy. The standard homeowners insurance policy will not cover damages caused by an earthquake or flood and protection for valuable jewelry, collectibles, and some electronics based on coverage limits.
Coverage
Included with homeowners insurance?
Dwelling/Structure
Yes
Personal liability
Yes
Personal belongings
Yes
Loss of Use (additional living expenses)
Yes
High-end electronics/special jewelry
Limited, requires add-on*
Equipment breakdown
Yes
Electrical outage
Yes*
Service lines
Yes*
Cyber liability
Yes*
Water damage
Yes
Flood
No**
Wind or hail
Yes, but not high winds***
Earthquake
No*
Pets
Yes*
* Available as add-on coverage if not part of policy
** Available through the National Flood Insurance Program and approved insurers
*** Windstorm rider may be required in hurricane or tornado areas
What does homeowners insurance cover?
A standard homeowners insurance includes dwelling coverage, personal belongings coverage, personal liability protection, and additional living expenses. You may need to purchase additional coverages based on your risk and needs.
Dwelling coverage
Dwelling coverage is the part of a homeowners insurance policy that can help cover the cost to repair or rebuild your home if it is damaged. Your dwelling consists of your home and any “other structures” on the property, like a garage or shed. The type of dwelling coverage you have depends on the type of homeowners insurance policy.
Personal property coverage
Your possessions are covered from damage or theft under personal property coverage. There are limits to standard personal property coverage depending on your policy and insurance carrier, usually $100,000. Specialty items like high-end electronics, special jewelry, furs, fine arts, firearms, and cash may not be covered. According to Steve Wilson, senior underwriting manager at Hippo Insurance, these items may need a “personal article” endorsement or add-on rider.
Personal liability protection
Homeowners insurance offers homeowners personal liability protection if someone is injured at your property (pet bites) or sues for damages. Some carriers offer identity theft and cyber liability as part of their personal liability coverage or as an add-on rider.
There are limits to standard personal liability coverage depending on your policy and insurance carrier. Basic personal liability homeowners policies typically have a $100,000 coverage limit.
Having certain items — like a pool or trampoline — can increase your liability as a homeowner. Also, exotic pets and certain dog breeds are excluded from some homeowners insurance policies. Some homeowners insurance companies will not offer coverage based on the size and breed of the dog, especially large dogs and breeds considered to be aggressive.
What is loss of use or additional living expenses?
“Loss of use” coverage, also known as “additional living expenses” or ALE, is included in most homeowners policies and provides reimbursement for temporary housing when a peril causes damage to your property or belongings that makes your home inhabitable.
In order for “loss of use” to be triggered, the damage must be related to a peril or covered event in the policy. Don’t assume that your insurance carrier will pay additional living expenses, because the definition of inhabitable varies by company.
Does homeowners insurance cover wildfire damage?
Yes, homeowners insurance covers wildfire damage. However, if you live in an area where wildfires are common, Steve Wilson, senior underwriting manager at Hippo Insurance, recommends getting a rider for extended replacement cost coverage under your dwelling coverage, because material costs to rebuild go up after a wildfire. Dwelling coverage is the part of a homeowners insurance policy that can help cover the cost to repair or rebuild your home if it is damaged.
It’s also important to make sure you have enough personal property coverage. There are limits to standard personal property coverage depending on your policy and insurance carrier — usually $100,000. Additionally, if you have extensive landscaping, Allstate recommends contacting your homeowners insurance provider because some companies have limited coverage for shrubbery.
Also, specialty items like high-end electronics, special jewelry, furs, fine arts, firearms, and cash may not be covered against wildfire damage. Wilson said these items may need a “personal article” endorsement or add-on rider.
For specialty jewelry, you can purchase a floater policy as an add-on to your homeowners insurance. Another option is to purchase standalone personal jewelry insurance. Your jewelry and fine art must be appraised before purchasing a floater or standalone policy.
It’s a good idea to take inventory of your furniture and personal possessions. Some homeowners insurance companies will have inventory lists for you to complete. If you have riders for fine art and specialty jewelry, you will be required to catalog and provide appraisals for them.
Does homeowners insurance cover jewelry?
Yes, standard homeowners insurance covers jewelry — but low coverage limits mean the standard coverage usually isn’t enough to fully replace or repair expensive jewels. There are three options to get more coverage for your jewelry: raising your personal property limit, purchasing a floater policy for your homeowners insurance, or purchasing personal jewelry insurance.
Even if you raise your personal property limit, the Insurance Information Institute notes, there are still limits on the amounts for individual pieces and overall losses. The III also says that although purchasing a floater policy for your homeowners insurance is more expensive, it offers the broadest coverage. Unlike the standard personal property coverage, floaters will cover accidental losses if you lose a costly item. Your insurance company will appraise your jewelry before you can purchase a floater.
A third option is to purchase personal jewelry insurance.”A standalone jewelry policy is a comprehensive, all perils policy, meaning it covers every type of loss unless specifically excluded,” explains Bryan Howard, director of product management for Jewelers Mutual. With standalone jewelry insurance, you must have your jewelry appraised by your insurer. Howard notes that the premium for personal jewelry insurance is typically 1-2% of the value. Premiums also vary based on where you live, the person who owns the jewelry, and the deductible you choose.
Does homeowners insurance cover damage to sewer lines?
Like water damage, your homeowners insurance will cover sewer damage that’s related to a named peril. If the damage is from sewer backup or a lack of maintenance of the sewer lines, you will not be covered. Most damage to sewer lines is due to human error — such as flushing grease or paper towels down the toilet, tree roots growing around pipes, old metal pipes, and neglected plumbing problems. Be sure to perform regular maintenance and upkeep to avoid sewer line issues, because homeowners insurance doesn’t cover for lack of maintenance.
If the sewer damage is sudden, unexpected, and related to a covered peril, your homeowners insurance will cover it. However, sewer and utility lines are usually owned and operated by a municipality or energy company. As a homeowner, you are responsible for where the service lines connect to your home, while the municipality or utility company is responsible for lines outside your home.
Sewer line coverage is rather limited when it comes to standard policies. Standard homeowners insurance doesn’t cover damage from backup of sewer lines, but it’s available as a service line add-on rider to your policy, which will be an additional cost. Check with your homeowners insurance provider to see if it offers additional coverage for sewer and service lines.
Additionally, flood damage is not covered under standard homeowners insurance and requires separate flood insurance.
Does homeowners insurance cover theft?
Yes, homeowners insurance insurance covers theft of your personal property, even if it occurs outside of your home. If damage or theft occurs due to covered event (known as an insurance peril), homeowners insurance will cover the loss. If your possessions are stolen, you’re covered under homeowners insurance’s personal property coverage. If your home is burglarized and the home itself is damaged, homeowners insurance will repair the damage under dwelling coverage.
Coverage extends to everyone listed on your policy like your spouse and children. If your child lives in a college dorm, homeowners insurance will protect their belongings. However, if your child lives off-campus, then renters insurance will be necessary.
There are limits to standard personal property coverage depending on your homeowners insurance policy and insurance carrier, usually $100,000. Specialty items like high-end electronics, special jewelry, furs, fine art, firearms, specialty bikes, and cash may not be covered by homeowners insurance in the event of theft.
Does homeowners insurance cover water damage?
Not all water damage is covered by homeowners insurance. For example, damage that’s the result of poor maintenance of pipes is not covered. Additionally, flood damage is not covered under standard homeowners insurance and requires separate flood insurance. Standard homeowners insurance doesn’t cover water damage from backup or sewer lines, but it’s available as an add-on rider. As for mold, if it’s a result of water damage from a covered peril — such as a burst pipe, wind or hail storm — it may be covered under standard homeowners insurance. Check with your provider to see if additional coverage is offered for backup and sewer lines.
Does homeowners insurance cover trampolines and treehouses?
Yes, homeowners insurance protects you under personal liability coverage if someone is injured on your property while using your trampoline or treehouse. However, there is a limit to this coverage: typically about $100,000. If you have a trampoline or treehouse and there is no exclusion in your homeowners insurance policy, you may be required to increase personal liability coverage amounts.
If a tree falls on your trampoline, treehouse, or swing set, it will likely be covered. Damage from wear and tear or lack of maintenance is usually not covered.
Does homeowners insurance cover personal liability?
Homeowners insurance offers homeowners personal liability protection if someone is injured at your property or sues for damages. Some carriers offer identity theft and cyber liability as part of their personal liability coverage or as an add-on rider. If the dog bites a guest, the mailman slips on your walkway, or someone is injured using your swimming pool, personal liability insurance protects you.
There are limits to standard personal liability coverage depending on your policy and insurance carrier. According to Allstate, basic personal liability homeowners policies typically have a $100,000 coverage limit. Having certain items — like a pool or trampoline — can increase your liability as a homeowner. Also, exotic pets and certain dog breeds are excluded from some homeowners insurance policies.
Does homeowners insurance cover lightning strikes?
Although lightning is covered under homeowners insurance, some carriers do not provide protection for power surges caused by lightning. It’s important to speak with your carrier to make sure you’re aware of any exclusions. Damage to your car that’s caused by lightning will not be covered by homeowners insurance, but it will be covered by comprehensive car insurance. If lightning causes damage to your house that makes it uninhabitable, you could be reimbursed for temporary housing, depending on your homeowners or renters insurance policy.
Floods, earthquakes, government seizures, mudslides, ordinance updates, sewer backups, and sinkholes are all perils that won’t be covered by homeowners insurance, according to Hippo Insurance. Those will require add-on coverage through a rider policy.
Does homeowners insurance cover AC units?
Your insurance provider will cover damage to your air-conditioning unit if it results from a covered peril, such as a tree falling. However, damage from wear and tear or lack of maintenance usually isn’t covered. Homeowners insurance covers damage to your dwelling and belongings, protects you from liability lawsuits, and pays for any additional living expenses if your home becomes inhabitable. This coverage includes your home’s mechanical systems, including air conditioning units. Standard homeowners insurance typically covers damage to AC units resulting from one of the specific causes listed in your policy.
Does homeowners insurance cover plumbing and pipe leaks?
Homeowners insurance will cover plumbing damage from burst pipes as long as its caused by a peril listed in your policy and not a result of negligence. Homeowners insurance won’t cover all water damage caused by leaking pipes. Damage resulting from negligence and normal wear and tear of pipes is not covered. Standard homeowners insurance also won’t cover damage from backup or sewer lines. That coverage is available as a rider.
Additionally, flood damage is not covered under the standard homeowners insurance policy and will require separate flood insurance. Most homeowners insurance policies will not cover mold damage unless it is caused by a covered peril like a burst pipe.
Does homeowners insurance cover swimming pools?
Yes, homeowners insurance covers swimming pools. Homeowners insurance protects you under personal liability coverage. So if someone slips and falls near your pool, insurance will cover any legal or medical fees associated with the incident.
If your pool is damaged, homeowners insurance will reimburse you for the loss if caused by a named insurance peril — an event listed in your policy — caused the damage. Coverage amounts will also vary based on whether your pool is in-ground or above-ground.
If your home came with a swimming pool, you probably paid an additional premium to increase your liability coverage. If you’re considering installing a swimming pool, contact your homeowners insurance to ensure you have proper coverage. Keep in mind that more coverage may increase your annual premium.
What does homeowners insurance not cover?
Earthquakes, floods, government seizures, mudslides, ordinance updates, sewer backups, and sinkholes are all perils that will not be covered by homeowners insurance, according to Hippo Insurance. Those will require add-on coverage using a rider policy or a separate coverage. Additionally, homeowners insurance doesn’t cover damage from improper maintenance or wear and tear.
Depending on your insurance provider, the following can be excluded from your personal liability coverage: exotic pets, certain dog breeds, a pool, or a trampoline. Typical homeowners insurance policies typically do not cover specialty items like high-end electronics, special jewelry, furs, fine arts, firearms, or cash.
To be covered by homeowners insurance, damage to your home and belongings must be from “insurance perils.” A peril refers to a specific event that caused damage to your home and belongings. Common insurance perils are fire, theft, and lightning.
Types of homeowners insurance policies
The type of homeowners insurance you need depends on the type of home you purchased: condo, townhome, single-family, rental, or mobile home. Your coverage will vary based on the type of policy you have. According to the III, the most popular policy is the HO-3.
Policy
Dwelling
Liability
Belongings
Peril type
HO-1: Basic*
Yes
No
No
Named
HO-2: Broad*
Yes
No
Yes
Named
Yes
Yes
Yes
Open/named
HO-4: Renters
No
Yes
Yes
Named
HO-5: Comprehensive**
Yes
Yes
Yes
Open
HO-6:Condo/Co-op
Yes***
Yes
Yes
Named
HO-7: Mobile Homes
Yes
Yes
Yes
Open/named
HO-8: Older homes
Yes
Yes
Yes
Named
Townhomes can be HO-3 or HO-6.
* Typically not considered sufficient coverage by lenders
** Typically for brand-new homes only
*** Covered under condo association’s master policy