Homeowners Insurance: What's Typically Covered (and What Isn't)

A standard homeowners policy is built from several distinct coverage parts, each protecting a different aspect of your home and finances. Understanding these parts helps you spot gaps before you actually need to file a claim.

Dwelling coverage

This pays to repair or rebuild the physical structure of your home if it's damaged by a covered peril, such as fire, windstorm or lightning. It's usually based on the estimated cost to rebuild, not the market value of the home.

Personal property coverage

This covers your belongings — furniture, electronics, clothing — if they're damaged, destroyed or stolen. High-value items like jewelry or fine art often have limited built-in coverage, and may need a separate rider or endorsement for full protection.

Liability protection

If someone is injured on your property, or you accidentally damage someone else's property, liability coverage can help pay for legal and medical costs up to your policy limit.

Additional living expenses

If your home becomes temporarily uninhabitable after a covered loss, this can help pay for hotel stays, meals and other extra costs while repairs are completed.

What's commonly excluded

Standard policies typically exclude flood and earthquake damage, which usually require separate policies. Damage from poor maintenance, pest infestations, and normal wear and tear are also generally not covered. It's worth reading your policy's exclusions section carefully, especially if you live in an area prone to flooding or seismic activity.

Choosing your coverage limits

Rather than insuring for your home's market price, focus on the estimated cost to fully rebuild it, including materials and labor in your area. Periodically reviewing your personal property coverage after major purchases, and asking your agent about flood or earthquake add-ons if relevant to your region, can help avoid unpleasant surprises later.