What Does Homeowners Insurance Actually Cover?
Most homeowners don't find out what their policy doesn't cover until they file a claim. Read this before you need it.
Financial Writer
What's Covered by Default
A standard HO-3 policy covers your dwelling (the structure), other structures (garage, fence), personal property, liability protection, and additional living expenses if you're displaced. It covers fire, wind, hail, theft, vandalism, and some water damage.
What's NOT Covered (and Often Surprises People)
Floods: Standard homeowners insurance never covers floods. You need a separate National Flood Insurance Program (NFIP) policy. Earthquakes: Separate earthquake insurance required, especially in California and the Pacific Northwest. Sewer backup: Often excluded but can be added as a rider for $40–$60/year.
How Much Coverage Do You Need?
Insure your home for its replacement cost, not its market value. These can differ significantly. Use a replacement cost estimator from your insurer, not Zillow.
Review Your Policy Annually
Home values and rebuilding costs have risen significantly. Review your dwelling coverage limits yearly to ensure you're not underinsured.
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