What Is Homeowners Insurance and What Does It Cover?

Updated: October 2017

Homeowners insurance policies are not one-size-fits-all. While a typical policy comes with certain coverages, it's usually customized to meet each individual homeowner's unique needs.

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.

Video Transcript

[On screen] "What is Homeowners Insurance?

[Voiceover] Want to learn about homeowners insurance?

In short, homeowners insurance helps protect you, your home and your belongings from a variety of unexpected events.

A standard policy includes four key types of coverage: dwelling, other structures, personal property and liability.

If your home is damaged by a covered event, like strong winds, dwelling coverage can help pay to repair it.

Let's say a detached structure on your property, like a shed, is damaged by a fire.

Other structures coverage can help pay for repairs.

Personal property coverage can help protect what's inside your home, like electronics, furniture and clothing if they're stolen or damaged.

If a visitor is injured at your home or you accidentally damage another person's property, liability coverage can help pay the related expenses.

Keep in mind, you may have to pay a deductible before your coverage kicks in.

And remember, each coverage type has a limit, which is the maximum amount your insurance will pay toward a claim.

When it comes to protecting your home, it's important to understand what your policy covers.

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What Does Homeowners Insurance Cover?

Homeowners insurance typically helps cover:

Your dwelling

Other structures on your property

Personal property

Liability

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.

Dwelling Protection

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, as well as other structures that are attached to it, 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.

Liability Protection

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 agent 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. A local agent can help you select the coverages and limits that make sense for you.

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Related Resources:

What Is Dwelling Insurance?

How Much Does Homeowners Insurance Cost?

What Does Home Liability Insurance Cover?

What Perils Are Covered By A Homeowners Insurance Policy?

This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2019 Allstate Insurance Company, Northbrook, IL.