What Does Homeowners Insurance Cover

The importance of carrying adequate insurance on your home and its contents cannot be stressed enough. What does homeowners insurance cover? The answer varies depending on the policy chosen and the additional coverage purchased, but standard homeowners insurance policies generally protect the structure of your home and the contents therein, providing financial reimbursement in the event that your property is damaged or destroyed by fire, hail, lightning, explosion, or other covered events. Liability insurance is also included; this protects you financially against legal action due to injuries sustained on your property. Living expenses are covered while your home is being repaired or rebuilt after a covered loss.

Structural homeowners insurance is usually subject to a deductible, which must be paid before insurance benefits are applied to the loss. Qualifying losses include fire and smoke damage, theft, vandalism, lightning, wind, hail, explosion, and damage due to frozen pipes. Sheds and garages are covered as well, typically at 10% of the total structural value of the home. Contents insurance provides reimbursement for your lost possessions; replacement value coverage allows homeowners to replace their lost goods with comparable new items while fair market value coverage provides reimbursement at the current value of the items lost.

Homeowners insurance typically does not cover flood or earthquake damage; these coverages are often available at an increased cost. Mold, fungus, and other infestations are also specifically excluded from coverage in most homeowners insurance policies. While your home’s contents are covered against loss, extremely valuable items may require additional coverage at higher cost. These include works of fine art, jewelry, gold, silver, and platinum stored in the home, firearms, and trading cards. By purchasing a scheduled personal property endorsement for your basic homeowners policy, you can protect these high-value items against theft and loss due to a covered event. Homeowners should examine their policies carefully to determine the level of coverage provided. After a major purchase or remodeling project, homeowners insurance policies should be updated to reflect the additional value of the home and its contents to insure that the property is fully protected in case of loss or damage.