What does homeowners insurance cover?

Your home is more than just your largest purchase, it's the center of your life. So, making sure it's insured should be a priority.

After a catastrophe, having homeowners insurance — and the right amount of coverage — can ensure you can afford to repair or replace damaged property and belongings. While homeowners insurance isn't mandated by law, anyone with a mortgage is likely required to have it.

A standard homeowners policy covers a lot of things, but not every eventuality or every part of your house.

Homeowners insurance can cover expenses after a robbery, fire or other covered event. There are several components to a standard policy:

Dwelling coverage: This pays for repairs to the structure of your home from covered events, like fire or theft

Personal property coverage: Replaces belongings that are stolen or damaged by a covered event.

Other structures coverage: Pays for repairs to exterior structures, like a detached garage, shed or fence.

Personal liability coverage: Can cover legal expenses if you are held responsible for damages to someone else in your home or for causing damages in their home.

Additional living expenses: If you need to relocate while your home is being repaired, this can pay for expenses like lodging, meals and laundry.

Medical payments coverage: If someone is injured in your home, this can help cover medical expenses.

Homeowners insurance covers a variety of situations, including:

Fire

Standard homeowners insurance policies usually cover damage due to fire, both house fires and wildfires, as well as smoke damage. Your policy should pay to replace or repair the house's physical structure, permanent fixtures, appliances and attached structures, as well as your personal belongings.

Lightning strikes are also covered perils, whether they cause a fire, damage appliances or wiring or injure a household member.

Severe weather

Homeowners insurance covers many weather-related scenarios, including damage caused by the weight of snow, ice and sleet. Sudden rain damage from a leaky roof may also be covered, though there are exclusions for wear and tear on the roof.

If the temperature hits freezing, your policy should help with a burst pipe, too.

Wind damage is often covered, including if it's caused by a tornado or hurricane. (Flooding associated with hurricanes is usually not covered.)

Depending on where you live, there may be separate deductibles for certain weather damage.

• In coastal states, homeowners policies may have separate deductibles for hurricanes and named storms, usually between 1% and 5% of your dwelling coverage.
• In areas prone to tornadoes, like the Great Plains and Midwest, there may be a separate wind and hail deductible, between 1% and 5% of your dwelling coverage.

Theft or vandalism

If your home is burglarized, your policy will cover both the cost of replacing lost belongings and repairing damage caused by the break-in.

A standard policy will cover theft whether the item was stolen from your house or elsewhere, though they're covered differently. Personal property taken from a residence is typically covered at between 50% and 70% of your overall insurance limit, according to the Insurance Information Institute, while belongings stolen elsewhere are limited to about 10%.

Most acts of vandalism are also covered, including spray paint damage and broken windows.

Falling objects

Damage from a tree is commonly covered, even if the tree's roots are on your neighbor's property. Your policy may also help with the cost of removing the tree, generally providing between $500 and $1,000.

Most other fallen objects are also included in standard policies — including baseballs, meteorites, satellites and airplane doors.

Some policy benefits are optional for an extra charge. Whether you need these add-ons depends on where you live, your risk tolerance and other factors:

Flood coverage

Most policies cover "sudden and accidental" water damage that can be traced to a source inside your home, like a burst pipe. Flooding from outside the home, however, usually requires a separate flood insurance policy.

The National Flood Insurance Program (NFIP) underwrites more than 90% of the flood policies in the US. However, NFIP coverage is limited to $250,000 for dwellings and $100,000 for belongings. It also doesn't cover basement contents, external buildings or swimming pools — and it doesn't reimburse living expenses while your property is being repaired.

A private flood insurance policy could cover these things, and offer higher limits than those policies written by the NFIP. Some of our top picks for flood insurance include Neptune Flood Insurance, which offers coverage of up to $4 million for buildings and up to $500,000 for contents, and can cover basement contents and swimming pools.

Earthquake coverage

Earthquake damage is also excluded from most homeowners insurance policies. If you live in an earthquake-prone area, getting this type of coverage is a no-brainer.

Earthquake coverage is available as either an add-on or a standalone policy, depending on your carrier and the state you live in.

Windstorm coverage

In states that frequently face tornadoes, hurricanes and other extreme weather, homeowners insurance alone may not cover all kinds of wind damage. Windstorm coverage can be sold as a standalone policy or added as an endorsement on a homeowners insurance policy.

This coverage may also have a named storm deductible, which kicks in if a major named storm hits your area. It's typically a percentage of your dwelling coverage limit.

Scheduled personal property

Some items in your home are only covered to a limited extent: Jewelry, for example, is often capped at $2,000. If you have valuables worth more, consider adding them to your policy individually, also known as scheduling.

Sewer and water backup coverage

A standard homeowners insurance policy doesn't cover the sewer line that connects your home to the public sewer. If that line becomes backed up, it could overflow in your home.

This endorsement covers that backup and any associated damage.

Identity theft coverage

Some homeowners insurance policies offer the ability to add identity theft coverage, which can help you get reimbursed for fraudulent charges, legal fees and more

Ordinance coverage

Also known as law coverage, this benefit can help if you need to upgrade your home to meet current building codes after a loss.

Homeowners insurance generally doesn't cover common maintenance costs or damage from normal wear and tear or neglect. That could include mold, mildew, termites, rodents and other pests, especially if proper precautions weren't taken.

Floods and earthquakes are also exempt from traditional homeowners policies. Damage caused by war, terrorism or civil unrest is usually excluded, as well, as is intentional damage caused by the property owner.

Most policies have low limits on valuables, usually about $1,500 or $2,000. If you have jewelry that's worth more, consider scheduling the piece separately. You can also get a standalone jewelry insurance policy, which will have a much higher limit and often includes maintenance costs, like stone tightening.

Having standalone jewelry coverage also means you can file a claim without it raising your home policy rates. One of the top jewelry insurance companies, BriteCo, has a $0 deductible and offers replacement coverage that can account for appreciation of up to 125% of the piece's appraised value.

Every policy has coverage limits that are typically laid out when you buy a policy. How much insurance you need depends on the cost of repairing or rebuilding your home, plus the amount of coverage you want for personal property and liability.

Home insurance policies can pay out differently: An actual cash value policy only gives you what an item is worth after depreciation, while a replacement cost policy will pay for a brand new substitute.

Your policy should cover repairs and replacement, additional living expenses and liability within your budget and the value of your home.

Nationwide scores above average for claims satisfaction on J.D. Power's 2024 Home Insurance Study and policyholders can earn a discount for bundling their plan with auto or term life insurance.

Lemonade gets high marks for affordability and its easy-to-use website and app. Policies can be purchased for as little as $25 a month and the company claims it settles 30% of claims within seconds.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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