Regardless of the size of your house, you’ve likely invested quite a bit of cash in keeping it nice. Combine that with all your belongings, and you’ve got quite a bit of value inside your home.

So, you might wonder, wouldn’t it be nice if something bad happened to your house and someone else has paid for it? Unfortunately, no insurance company does that, but they do cover quite a bit else. That’s what this article’s for. 

So what does homeowners insurance cover, and what does it not? Read on to finally get it straight and rest easy with your accurate knowledge. 

What Is Homeowners Insurance?

Homeowners insurance is an insurance policy created to help you cover the cost of home repairs or replacements in the event of fires, theft, and parallel dangers.

It can also help you pay for the repair or replacement of another person’s property that you accidentally damaged or the medical bills of a visitor who was accidentally injured in your home. 

What Does Homeowners Insurance Cover? 

We have discussed the basic coverage of homeowners insurance in the previous section. In most cases, your policy will cover you for damages caused by natural disasters, like lightning strikes, hail, windstorms, etc.

Then again, not all such natural catastrophes will be included in your basic policy. So what does homeowners insurance not cover? For example, you may not be protected against earthquakes or even floods. 

The good news is, you can purchase separate insurance policies to ensure that you get maximum protection against those perils and are protected up to how much you can afford. 

So again, what does a homeowners insurance policy cover? That’s what we’re discussing below in detail. 

Dwelling and Other Structures 

Among the most essential coverages of your homeowners’ insurance policy is dwelling protection. This means your policy will pay for damages to anything that covers your house’s structure – for example, your roof, walls, etc.

Dwelling protection also includes other structures that are attached to your home (garage, deck, etc.) or those that are not attached but are within the physical parameters of your property (fence, detached workroom, etc.). 

Personal Property 

The good thing about homeowners insurance is that you don’t only get protected for your house itself and surrounding structures, but even for everything you have inside. In short, your personal stuff.

Let’s say a burglar stole your laptop or PC from your home, or a flood ravaged your designer suits. You can use your personal property coverage to help you pay for the costs of repairing or replacing both as long as the risk is covered. 

Also note that there are limits for personal property coverage. That means you may not be protected for your expensive jewelry or antique paintings unless you pay for that extra protection. 

Liability 

Let’s say you have a guest or perhaps a tradesman working on your plumbing or electrical system. If they accidentally hurt themselves while inside your property, your homeowners insurance can help pay for your legal expenses and their medical bills.

Of course, that’s if they establish that you were, indeed, at fault. In any case, you can raise your coverage limits through a personal umbrella policy, which is simply added protection on top of your standard coverage. 

Knowing Your Coverage Limits 

By now, you should already have a good understanding of what damage homeowners insurance covers. Now it’s time to talk about another essential concept when it comes to your policy: your coverage limit or cap. 

Again, remember that every coverage in every homeowners insurance policy has a cap. This is the highest amount that your insurer would pay you for a covered loss.

You can, however, increase your limits according to your needs and capacity to pay. In raising your cap, you’ll also want to consider your home’s current value as well as that of your belongings. Add to that the potential costs of repairing or replacing them in the event of damage due to a covered risk. 

Understanding Deductibles

Your deductible is how much you need to pay from your own pocket before your insurer takes care of the rest of your covered losses. If you get a plan with a higher deductible, you will pay less in premiums. 

Deductibles are also one of the crucial reasons you need to read your policy as thoroughly as possible. If you have any questions, it’s best not to assume and just ask your agent directly.  

Different Providers and Their Nuances

All companies offering home insurance will probably give you the same answer when asked, “what is homeowners insurance and what does it cover?” However, that doesn’t mean they won’t differ significantly in many other aspects. 

For example, their pricing will most certainly be different. That means you may get the same level of coverage for a higher or lower cost, depending on the insurer you choose. 

Sometimes, two companies may also offer the same rate for the same coverage, but one of them will provide perks, such as discounts.   

The idea is to shop around and compare different offers from various insurers. That’s because they can have nuances that may seem trivial at the outset but can actually make a huge difference in the long run.  

Understanding Your Homeowners Insurance Policy

Homeowners insurance can be a tricky business. You’d think you’ve mastered the answer to the question, “what does homeowners insurance cover?” and then realize that you never really understood a thing.

Clearly, there are fine details that you need to be familiar with in order to see that thin line between what’s covered and what’s not. Missing that line can be dangerous because then, you may find yourself with totally nothing to count on when the unthinkable happens.   

We have more educational articles like this on our blog. Keep reading!

Jane