What Does Homeowners Insurance Cover?

By Danielle Smyth - Updated March 09, 2018
Exterior of small American house with blue paint

Homeowners insurance is a necessary expense if you own a house. In fact, most lenders require you to have insurance on a property if you’re applying for a mortgage. This protects the interest of the financial institution lending you the money in the event disaster should strike. Of course, your best interests are also safeguarded by homeowners insurance coverage. What is included in the typical homeowners insurance policy?

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Damage from high winds, fires or non-flood water is usually covered under a standard homeowners insurance policy. Losses resulting from flooding, earthquakes or other natural disasters typically require additional insurance coverage.

How Can Coverage Vary?

The short answer is that coverage depends greatly upon the policy you select. Your geographic location will also play a large role in determining the sorts of protections you might need under a homeowners insurance policy. Thorough research on the history of natural disasters in your area can put you in a better position when it comes to navigating the tricky waters of insurance policy documents. Speaking to an insurance representative may also give you guidance as to what protections you need most.

Generally speaking, there are four types of coverage you might have as a homeowner. They are dwelling coverage, other structures coverage, personal property coverage and liability coverage. All of the disasters discussed below fall mostly under the first three coverage categories.

What Does Homeowners Insurance Cover if There is a Hurricane?

Damage from high winds is usually covered under your homeowners insurance policy. Take care to read your policy documents very carefully, however. In some instances, deductibles for hurricane coverage may be higher than those for standard wind damage claims.

The flooding that often accompanies hurricanes is not covered under a standard insurance policy. To be protected from this sort of water damage, you might need a separate flood insurance rider.

What Does Homeowners Insurance Cover if There is a Fire?

Typically, your home, any garage or shed you might have and your personal belongings are protected in the event of a fire. Both fire damage and smoke damage should be covered by your homeowners policy. Additionally, if your home were uninhabitable after a fire, your homeowners policy would likely cover the cost of temporary living arrangements for your family.

What Does Homeowners Insurance Cover if There is Water Damage?

Whether water damage is covered by your insurance policy is dependent on the cause of the event. In most cases, damage from burst pipes or water heaters is covered by homeowners insurance policies if the incident is sudden or accidental. If the pipe or water heater had known defects or had not been maintained, however, you might not be covered.

Water damage resulting from flooding, however, is a separate issue. Usually, damage from flooding requires a separate flood insurance policy. This additional coverage might also include scenarios such as backup from a septic tank, sump pump, sewer or drain.

What Does Homeowners Insurance Cover if There is an Earthquake?

Earthquake insurance is not typically part of a standard homeowners policy. However, many private insurers offer a separate coverage option to protect your home's value in the event of an earthquake.

Deductibles for earthquake policies are usually five to 15 percent higher than those for other sorts of policies. In addition, the cost of earthquake insurance varies widely from region to region, depending on that area’s risk of a quake.

It’s critical to have a clear understanding of your homeowners insurance coverage before disaster strikes. Having an emergency fund set aside in the amount of your deductible is also a smart idea. If you find that you are confused about your coverage levels, deductibles or policy agreement, set up an appointment to speak with a representative from your insurance agency.

About the Author

Danielle Smyth is a writer and content marketer from upstate New York. She holds a Master of Science in Publishing from Pace University. Her experience includes years of work in the insurance, workers compensation, disability, and background investigation fields. In addition to being the content writer and social media manager for Alliance Worldwide Investigative Group, she has written on legal topics for a number of other clients. She owns her own content marketing agency, Wordsmyth Creative Content Marketing (www.wordsmythcontent.com), and she enjoys writing legal articles and blogs for clients in related industries.

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