A homeowners policy protects your house, your belongings and your liability. The exclusions matter as much as the coverage.
Key facts
- A standard homeowners policy covers the dwelling, other structures, personal property, loss of use and personal liability.
- Flood and earthquake damage are usually excluded and need separate coverage.
- Policies list covered perils, and wear and tear or maintenance problems usually aren’t covered.
- Mortgage lenders usually require homeowners insurance.
Homeowners insurance bundles several protections. Knowing what each part does helps you set the right limits and spot gaps.
The main parts of a policy
| Coverage | What it protects |
|---|---|
| Dwelling | The structure of your home |
| Other structures | Detached garages, sheds and fences |
| Personal property | Your belongings, at home and often away from home |
| Loss of use | Extra living costs if your home can’t be lived in after a covered loss |
| Personal liability | Injuries or damage you cause to others |
| Medical payments to others | Minor injuries to guests, regardless of fault |
Common exclusions
- Flood: not covered by standard policies. See our guide to flood insurance.
- Earthquake: usually needs a separate policy or endorsement.
- Wear and tear, pests and poor maintenance: generally excluded.
- High-value items: often limited unless added separately.
Smart tip
Make a home inventory with photos or video of each room and your major belongings. Store it in the cloud so it survives whatever damages the house.
Setting the dwelling amount
The dwelling limit should reflect the cost to rebuild your home, which isn’t the same as its market value or purchase price. Construction costs change, so review it every year or two.
Check this
Check whether your policy pays replacement cost or actual cash value for your belongings. It can make a big difference to a claim.
Reviewing your policy
Read the declarations page each renewal to confirm limits, deductibles and endorsements. If anything is unclear, ask your insurer or agent to explain it in writing before you need to make a claim.
Questions we hear
Does homeowners insurance cover water damage?
Sudden, accidental water damage, like a burst pipe, is often covered. Gradual leaks and flooding from outside usually aren’t.
Are valuables like jewelry fully covered?
Many policies limit coverage for jewelry, collectibles and similar items. You can add a rider or schedule them for more coverage.
Does it cover a home business?
Usually only in a limited way. Ask about a home business endorsement or a separate policy.
This guide is general information, not insurance or legal advice. Coverage, prices and rules vary by insurer and by state, so read your policy documents and check with your insurer, a licensed agent or your state’s department of insurance before you decide.