What is homeowners insurance and what does it cover?
Last updated: November 2023
Homeowners insurance helps provide financial protection for your home and personal belongings. Learn the basics of what homeowners insurance is and what it covers.
What is homeowners insurance?
Homeowners insurance is made up of coverages that may help pay to repair or replace your home and belongings if they are damaged by certain perils, such as fire or theft. It may also help cover costs if you accidentally damage another person's property or if a visitor is injured at your home.
What does homeowners insurance cost?
The costs of homeowners insurance depend on a number of factors, including the coverages you select, features of your home and the value of your personal belongings. There may also be extra costs for additional coverage or increased coverage limits. Your insurance provider can help you choose the coverages that fit your needs and also help determine if you are eligible for any policy discounts.
What does homeowners insurance cover?
Homeowners insurance typically helps cover:
- Your dwelling
- Other structures on your property
- Personal property
- Liability for injuries or damage to someone else's property
You may also be able to purchase additional coverages for greater protection. 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. You may be able to purchase separate insurance policies to help protect your home and belongings against those types of risks.
One of the basic coverages of a homeowners insurance policy is dwelling protection, which helps cover the structure of the home in which you live (e.g. the house's foundation, walls and roof). Dwelling protection may also help cover other structures that are attached to the home, such as a garage or a deck, against certain risks.
Other structures protection
Most homeowners insurance policies also include coverage for other structures that are on your property but separate from your home, like a detached garage, tool shed or fence.
Personal property protection
Homeowners insurance doesn't just help cover damage to your home. It may also provide coverage for the personal belongings you keep within it. Suppose your electronics are stolen from your home or your furniture is damaged by a fire. Personal property protection may help pay to repair or replace your belongings if they are damaged or destroyed by a covered risk. Many insurers offer optional coverages that may further help protect the stuff you own. For instance, you may be able to purchase extended coverage for items such as jewelry, watches and furs that have values above your personal property coverage limits.
A typical homeowners insurance policy provides liability coverage when someone not living with you is injured while on your property. Suppose a visitor trips over your broken porch step. Bodily injury liability coverage may help pay for your resulting legal expenses or the visitor's associated medical bills if you are found at fault. You may be able to increase your liability coverage limits by adding a personal umbrella policy. Your agent can explain what options are available to you.
Coverage limits and deductibles
Keep in mind that each coverage in a homeowners insurance policy is subject to a limit — the maximum amount your policy would pay toward a covered loss. You may be able to adjust your coverage limits to your needs — taking into account, for example, the value of your home and belongings and how much it may cost to repair or replace them if they are damaged or destroyed by a covered risk.
In most cases, you will typically have to pay your deductible before your insurance benefits kick in to help cover a loss. Read your policy or contact your insurance provider to review your coverage limits and deductibles. You can typically adjust them to fit your needs.
The protections offered by a homeowners insurance policy may serve as a safety net if the unexpected occurs. Your insurance provider can help you select the types of coverage and limits that make sense for you.