What is covered by standard homeowners insurance? (2024)

Homeowners coverage provides financial protection against loss due to disasters, theft and accidents. Most standard policies include four essential types of coverage: coverage for the structure of your home; coverage for your personal belongings; liability protection; coverage for additional living expenses

Coverage for the structure of your home

Your homeowners policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters listed in your policy. Most policies also cover detached structures such as a garage, tool shed or gazebo—generally for about 10 percent of the amount of insurance you have on the structure of the house.

A standard policy will not pay for damage caused by a flood, earthquake or routine wear and tear.

When purchasing coverage for the structure of your home, remember this simple guideline: Purchase enough coverage to rebuild your home.

Coverage for your personal belongings

Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disasters. The coverage is generally 50 to 70 percent of theinsurance you have on the structure of the house.

The best way to determine if this is enough coverage is to conduct a home inventory.

Personal belongings coverage includes items stored off-premises—this means you are covered anywhere in the world. Some companies limit the amount to 10 percent of the amount of insurance you have for your possessions. You also have up to $500 of coverage for unauthorized use of your credit cards.

Expensive items like jewelry, furs, art, collectibles and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items to their full value, purchase a special personal property endorsem*nt or floater and insure the item for its officially appraised value.

Trees, plants and shrubs are also covered under standard homeowners insurance—generally for about $500 per item. Trees and plants are not covered for disease, or if they have been poorly maintained.

Liability protection

Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter (or even your dog) accidentally ruins a neighbor’s expensive rug, you are covered. (However, if they destroyyourrug, you’re out of luck.)

The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit stated in your policy documents.

Liability limits generally start at about $100,000, however, it’s a good idea to discuss whether you should purchase a higher level of protection with your insurance professional. If you have significant assets and want more coverage than is available under your homeowners policy, consider purchasing anumbrellaor excess liability policy, which provides broader coverage and higher liability limits.

Your policy also provides no-fault medical coverage, so if a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses can be paid without a liability claim being filed against you. It does not, however, pay the medical bills for your own family or your pet.

Additional living expenses (ALE)

ALE pays the additional costs of living away from home if you cannot live there due to damage from a an insured disaster. It covers hotel bills, restaurant meals and other costs, over and above your usual living expenses, incurred while your home is being rebuilt.

Keep in mind that the ALE coverage in your homeowners policy has limits—and some policies include a time limitation. However, these limits are separate from the amount available to rebuild or repair your home. Even if you use up your ALE your insurance company will still pay the full cost of rebuilding your home up to the policy limit.

If you rent out part of your house, ALE also covers you for the rent that you would have collected from your tenant if your home had not been destroyed.

Next steps: Purchasing a home? Get the Home Buyers Insurance Checklist.

What is covered by standard homeowners insurance? (2024)

FAQs

What is covered by standard homeowners insurance? ›

Many homeowners policies cover damage caused by "just about anything," unless specifically excluded. Most catastrophes are covered. For example, wind damage from hurricanes or tornadoes is covered as a windstorm peril. But, flood damage and earthquake damage are NOT covered by a standard homeowners policy.

What does a standard homeowners policy cover? ›

Home insurance usually covers the structure of your home and your personal belongings, typically covering the cost to repair or rebuild your home after a covered event, such as fire, hurricane, vandalism, or theft. Many policies will also cover detached structures, such as a garage, shed, fence, or gazebo.

Which of the following would be covered by a home insurance policy? ›

Generally, a homeowners insurance policy includes at least six different coverage parts. The names of the parts may vary by insurance company, but they typically are referred to as Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability and Medical Payments coverages.

Which of the following does a standard homeowners insurance policy cover quizlet? ›

Typical homeowners insurance policies offer coverage for damage caused by fires, lightning strikes, windstorms and hail. But, it's important to know that not all natural disasters are covered by homeowners insurance. For example, damage caused by earthquakes and floods are not typically covered by homeowners insurance.

What is not included in a standard homeowners policy? ›

Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered. Damage caused by smog or smoke from industrial or agricultural operations is also not covered. If something is poorly made or has a hidden defect, this is generally excluded and won't be covered.

Which of the following would not be covered under a standard homeowners policy? ›

Many homeowners policies cover damage caused by "just about anything," unless specifically excluded. Most catastrophes are covered. For example, wind damage from hurricanes or tornadoes is covered as a windstorm peril. But, flood damage and earthquake damage are NOT covered by a standard homeowners policy.

What is a standard property policy? ›

A Standard Property Policy combines in one form many of the provisions of the common policy conditions, commercial property conditions, building and personal property coverage, and basic causes of loss forms.

Which of the following items does homeowners insurance not cover? ›

The most common exclusions to a homeowners insurance policy are related to large-scale disasters, such as floods or war; damage due to negligence or normal wear and tear; and inherently risky items, such as trampolines. But you can buy additional coverage to protect those things.

What is the contents coverage on a homeowners policy? ›

Contents insurance helps pay to replace or repair your personal belongings if they're stolen or damaged by a covered peril, such as a fire. So, if someone breaks into your home and steals your laptop, or your clothing and furniture are ruined in a fire, you may find that contents insurance helps cover the loss.

What does a standard insurance policy consist of? ›

While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies consist of: bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist.

Which of the following will a standard homeowners hazard insurance policy not cover? ›

Hazard insurance refers to the portion of your homeowners policy that protects your dwelling from physical damage caused by named perils such as fire or hail or by theft or vandalism. Hazard insurance does not cover damage resulting from certain perils such as flooding and earthquakes.

Which of these would be covered in a standard title insurance policy quizlet? ›

Which of these would be covered in a standard title insurance policy? The answer is forged documents. Title insurance protects against forged documents, but does not protect against claims of parties in possession because the grantee should have visited the property; nor does it cover unrecorded liens.

What is the standard coverage for homeowners insurance? ›

Homeowners insurance coverage pays to repair or replace damaged property, including your belongings and the structure of your house. Home insurance generally covers damage due to fire, wind or snow, but it won't cover floods or earthquakes.

Which of the following is typically included as part of a standard homeowners insurance policy? ›

Standard homeowners insurance includes coverage for your house, other structures on your property, your belongings, personal liability, medical payments coverage to others, and even temporary living expenses while your home is being rebuilt or repaired due to a covered loss.

Which would normally not be included in a standard homeowners insurance policy quizlet? ›

The damage from normal wear and tear is one of the excluded perils from a typical homeowners' insurance policy.

What is the most common basic homeowners insurance policy? ›

The most common type of homeowners insurance policy is the standard HO-3 Special Form policy. HO-5 policies offer the broadest coverage of all policy types. Open peril coverage means losses are covered unless specifically excluded, while named peril coverage means only named loss types are covered.

What do most homeowners policies exclude coverage for? ›

Earthquakes, landslides and sinkholes generally aren't covered under home insurance. Exceptions include Florida and Tennessee, where insurers must offer optional sinkhole protection. Aside from that, you'll need separate coverage for these disasters, which your insurer can help you find.

What is covered under a property policy? ›

Property insurance provides financial reimbursem*nt to the owner or renter of a structure and its contents in case there is damage or theft—and to a person other than the owner or renter if that person is injured on the property.

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