What Does Homeowners Insurance Cover?
A standard home insurance policy (also known as an HO-3) protects your house for any issues that aren’t specifically excluded in the policy. Common exclusions include earthquakes, flooding, sinkholes, power failure, neglect, wear and tear, and intentional damage.
Personal property (your belongings) is covered for specified “perils” in a standard home insurance policy. Vandalism, theft, fire, lightning and explosion are just some of the problems covered by home insurance.
Standard home insurance policies include the following main coverage types:
Dwelling: A primary coverage that pays to repair or rebuild your home if it’s damaged under a covered issue. In addition, it covers attached structures, like a deck or garage.
Other structures: This covers the cost to repair or replace structures that aren’t attached to your home, such as a fence or in-ground swimming pool.
Personal property: This pays to repair or replace your belongings if damaged from a covered incident, such as a fire or theft. Your personal belongings include your clothes, jewelry, electronics, furniture, kitchen appliances and other items.
Liability: This covers property damage and injuries you accidentally do to others. For example, if a visitor is seriously injured after falling down your icy steps, your home liability coverage could pay for a settlement. If there is a lawsuit, it also could pay for a court judgment against you and your legal defense costs.
Medical payments to others: This covers minor medical claims for someone hurt in your home (who isn’t a household member), regardless of fault. For example, if a guest slips on an unsecured rug and is hurt, medical payments coverage can pay for their medical expenses. Coverage amounts are on the smaller side, such as $1,000.
Additional living expenses: If you’re unable to live in your home due to an issue covered by your policy (like a fire), additional living expenses coverage reimburses extra costs incurred such as a hotel bill, restaurant meals and other necessary services, like storage.
Related: How much home insurance do you need?
What’s Not Covered by Homeowners Insurance?
Common exclusions found in a standard California home insurance policy include problems like earth movement (including earthquakes, landslides, sinkholes and mudflows), floods, power failure, nuclear hazard, war, neglect or wear and tear, vermin and insect infestations and intentional loss.
Also not covered is “ordinance or law,” which means home insurance won’t pay to bring your home up to code but only to the condition it was in before the loss. If there are new codes that builders must adhere to when repairing or rebuilding your home, you’re responsible for these extra costs unless you pay for an endorsement that will cover these outlays.
It’s always wise to read your policy closely to understand what is excluded from coverage.
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