What Does Home Insurance Cover? 

by COUNTRY Financial

Buying a home is a major accomplishment. In addition to your sense of pride, you may also be a little concerned about the financial responsibility of home ownership. While you’ll have to handle those mortgage payments, having reliable homeowners insurance can give you financial protection against many threats to your home and your finances.

But what does home insurance cover? And equally as important, what doesn’t home insurance cover? 

This article provides a general explanation of how home insurance coverages are designed to work. Your actual protection if you have a claim will depend on the types of coverages and limits you selected when you bought or renewed your home insurance. Your homeowners insurance policy includes the full details of your coverage with any restrictions or exclusions. 

Key takeaways

• Home insurance is a contract between you and your insurance company.
• It protects against certain sudden events such as fire, wind, hail, lightning and theft.
• It does not cover damage caused by long-term wear and tear or maintenance issues.
• Some risks require endorsements or separate policies, such as flood or earthquake coverage.
• Coverage limits and deductibles affect how much you are paid after a claim.

What is homeowners insurance? 

Homeowners insurance is a contract between you and your insurer. In exchange for paying a regular premium, your insurance company agrees to provide financial protection for covered losses.

Your homeowners insurance policy outlines:

• What events are covered
• What property is protected
• Your coverage limits
• Your deductible
• Any exclusions or endorsements

That regular payment for protection is called your premium. 

What events are covered by home insurance? 

Many people think of storm damage or fire when they think of home insurance protection. Those are just two examples of events, known as perils, that may be covered by home insurance. The covered perils applicable to your policy will be listed in your homeowners insurance policy documents. Common examples* of perils include:

• Fire or lightning 
• Hail 
• Windstorm 
• Vandalism 
• Theft 
• Smoke 
• Electrical damage 
• Frozen pipes  

* This list of perils is not exhaustive and not intended to represent perils that are covered in all home insurance policies. Coverage for certain perils may be optional and must be purchased by the homeowner for an additional cost.  Learn more about home insurance coverage.  

Does home insurance cover more than my home? 

Other coverage types that may apply when your home is damaged by a covered event:

Auxiliary private structures coverage 

Auxiliary private structures coverage protects fences, sheds, detached garages and other identified structures on your property.  

Personal property coverage 

Personal property coverage is designed to help address damage to fences, sheds, detached garages and other identified structures on your property. From furniture and electronics to your clothes and home décor items, your personal property coverage may provide coverage if your belongings were damaged by a covered event, up to the limits of your policy.

Personal property coverage also has limits on certain categories of belongings. For higher valued items, talk to your insurance agent about identifying those items for additional protection, known as scheduled personal property coverage.  

Additional living expense coverage 

Additional living expense coverage helps with the cost of a rental property, hotel or other alternatives when your home is damaged by a covered event and is uninhabitable.

Coverage types that may help address financial costs when people are injured on your property or when you or someone in your household causes damage to others:

Liability coverage 

Liability coverage provides protection when you are legally responsible for injuries to others or damage to other people’s property. 

Medical payments coverage 

Medical payments coverage is designed to help with medical costs associated with injuries that happen on your property or that you or a member of your household may cause.

What’s not covered by home insurance? 

Generally, home insurance is designed to help address sudden damage caused by a storm, fire, wind, hail, vandalism or other covered perils. When damage happens over time due to age, wear and tear or maintenance issues, those repairs are generally not covered by home insurance.

Examples of what’s not covered by home insurance

• A rotting deck: A wooden deck ages and rot makes it unsafe to use. Replacing that deck would not be covered by insurance. 

• A moldy basement: If mold is found in a damp basement and grew over time rather than resulting from a covered peril, remediation costs would generally not be covered by home insurance.

How much home insurance do I need? 

A standard home insurance policy provides base protection for your home and its contents. However, the right amount of coverage depends on your personal financial situation and the risks your home faces.

When determining how much home insurance you need, consider:

• Your home’s replacement cost, not its market value
• The total value of your personal belongings
• Your liability exposure if someone is injured on your property
• Local risks such as severe weather, wildfire, hail or flooding
• Whether you need endorsements or separate policies for specific risks

Depending on these factors, you may need to increase coverage limits, add endorsements or purchase complementary policies to fully protect your home.

Learn more about how much home insurance you need.

Additional home insurance coverage

Valuables, antiques and collectibles 

Home insurance may cover your belongings, but some categories of possessions have limits. If you have higher value jewelry or a collection that exceeds those policy limits, you may be able to identify those valuables for additional coverage through scheduled personal property coverage. By scheduling items and their value on your home insurance, you may receive financial compensation for their loss if they are damaged or stolen, subject to policy terms.

Sump pump and sewer backup 

Sump pump failure and sewer water backing up into your home is excluded from home insurance policies, but you can add a sump pump and sewer backup endorsement  to your policy to provide this additional protection.

Earthquake endorsement 

Earthquake damage is excluded from home insurance coverage, but you can add the Earthquake Endorsement to your policy. 

Metal roof – cosmetic coverage

For roof damage from a covered storm like a hailstorm, your home insurance may help pay for structural damage to your metal roof. If the damage is only cosmetic, such as small dents caused by hail, cosmetic metal roof protection may need to be added to your policy as an endorsement for that damage to be covered.

Other coverage options worth exploring alongside your home insurance

Flood insurance 

Flood insurance is designed to help address damage caused specifically by flood water to your property. Offered by the federal government and limited private insurance companies, your property needs to meet certain guidelines to qualify. Talk to your insurance agent for more information. 

Umbrella liability insurance

Umbrella insurance is designed to help address liability exposure beyond the limits of your home and car insurance. An umbrella policy may provide an additional layer of liability coverage at a relatively modest cost. Talk with your insurance agent to see if this type of policy makes sense for you.

Home or extended warranties

While these are not insurance policies, home warranties or extended warranties can provide protection for repair or replacement of appliances and home systems, like HVAC. These are not part of your home insurance and generally not offered by insurance companies.

When should you review your home insurance coverage?

You should review your homeowners insurance coverage when:

• You renovate or remodel your home
• You replace your roof
• You purchase high-value items
• Property values increase
• You finish a basement or add square footage
• You install a pool, trampoline or detached structure

Regular coverage reviews help ensure your protection keeps pace with changes in your home and finances.

Meet with your insurance agent

If you have more questions about home insurance and how to best protect the investment you’ve made in your home, talk to your local insurance agent.  

Published 5-31-23
Updated 3-26-26