2024-01-01 · personal, property

Homeowners Coverage

Overview

Homeowners insurance protects your home, personal belongings, and finances if you face damage or liability claims. Most policies bundle dwelling coverage with personal property and liability, but limits and exclusions vary widely.

What homeowners insurance typically covers

Dwelling: the structure of your home, attached structures, and built-in systems.
Other structures: detached garages, sheds, or fences.
Personal property: furniture, electronics, and clothing (often with sublimits).
Liability: injuries or property damage you cause to others.
Loss of use: temporary living expenses if your home is uninhabitable.

Common exclusions and limitations

Floods and earthquakes: usually excluded and require separate policies.
Wear and tear: maintenance issues are not covered.
High-value items: jewelry and collectibles may have low sublimits.
Vacancy: coverage can be limited if the home is vacant for long periods.

Key cost factors

Home rebuild cost: higher replacement cost increases premiums.
Location risks: wildfire, storm, or crime rates impact pricing.
Deductible choice: higher deductibles lower premiums.
Claims history: prior claims can raise rates.

How to compare policies

Use replacement cost, not market value: ensure dwelling limits match rebuild costs.
Check personal property coverage: confirm replacement cost vs actual cash value.
Review liability limits: consider higher limits or umbrella coverage.
Evaluate endorsements: add riders for valuables, water backup, or equipment breakdown.

Tips for choosing coverage

Create a home inventory to validate personal property limits.
Ask about discounts for security systems, roof upgrades, or bundled policies.
Review limits annually as property values and renovation costs change.

Frequently asked questions

Does homeowners insurance cover roof damage? Yes for sudden covered events like wind or hail, but not for normal aging.

What if my home is underinsured? You may receive a reduced payout, especially if the policy has coinsurance clauses.

Do I need a separate flood policy? Yes—flood damage is typically excluded from standard homeowners policies.