Homeowners Insurance

Coverage specifics

What's covered by a home owner’s insurance policy?

A standard home owner’s insurance policy, also known as an HO-3 policy, generally protects your home and your personal property from damage caused by:

  • Fires or lightnin
  • Windstorms (including hurricanes and tornadoes) or hail
  • Explosions
  • Riots or civil commotions
  • Aircrafts
  • Vehicles
  • Smoke
  • Theft or vandalism (sometimes called malicious mischief)
  • Falling objects
  • Weight of ice, snow, or sleet
  • Freezing of plumbing, heating, air conditioning, or other household systems

Your home owner’s policy also provides personal liability coverage, which protects you if someone is hurt or injured by you or your family while on your property.

Many home insurance policies cover most damage unless something is specifically excluded. It's extremely important to read your policy thoroughly and know exactly what it covers.

What's not covered by a home insurance policy?

A standard home owner’s insurance policy, also known as an HO-3 policy, typically does not cover damage caused by floods or earthquakes.

  • Other exclusions can include:
  • Earth movement (as in earthquakes and landslides)
  • Water damage
  • Power failure
  • Neglect
  • War
  • Nuclear hazard
  • Intentional loss
  • Government action
  • Collapse (your policy may include some coverage)
  • Mold, fungus, or wet rot (your policy may include some coverage)
  • Birds, vermin, rodents, or insects
  • Wear and tear or deterioration
  • Ordinance or law (your policy may include some coverage)

Because policies vary, it's important that you read yours thoroughly to know what is and isn't covered.

What does personal liability cover on my home insurance policy?

Personal liability insurance, also known as liability insurance, covers you if someone is injured (or their property is damaged) on your property. Liability insurance coverage also follows you and will pay for losses anywhere in the world if you're deemed liable for injuring or causing damage to others.

Liability coverage might also pay for medical expenses if someone is injured in your home, which sometimes helps to avoid lawsuits.

If you're sued, liability insurance usually pays for your defense in court as well. The amount of liability insurance coverage provided by a policy is usually allotted for "each occurrence."

What does personal property insurance coverage include?

Personal property insurance covers items inside your home that are owned by you and your family. Examples of personal property include your clothes, furniture, furnishings, and appliances.

Most home owners policies will automatically cover your personal property up to 40 percent of the amount of insurance that you have on the home itself. Antiques, rare items, or outdated items are often not covered under personal property insurance.

Does home insurance cover additional living expenses?

Additional living expense (ALE) coverage is a type of insurance included with most home owners policies. It pays for necessary additional living expenses, making sure you and your family can maintain your normal standard of living if you have to temporarily relocate due to a claim.

If you're unsure if this type of coverage is included on your home owners policy, call your agent or review your policy documents.

Is the property in my car covered by my home insurance policy?

Typically, personal belongings not in your home are covered at about 10 percent of the value of the coverage you have on your home. But all policies are different. Often, there are limits on the amount of coverage for things that are frequently stolen from vehicles, like computers and electronics. When you purchase your coverage, make sure to read your policy and purchase additional riders to extend that coverage if necessary.

Insurance coverages defined

What is umbrella insurance?

Umbrella insurance is a type of liability insurance that covers you if your basic home insurance (or car insurance) policy doesn't pay enough, or doesn't cover a specific incident. It won't replace your house or your car, but it will cover incidents in which you're liable for an injury or property damage. Once your basic insurance policy pays its limit, your umbrella insurance will pay the rest up to its limit. If you're ever sued, umbrella insurance will also cover your legal costs, including lawyers' fees.

What is property damage insurance?

The property damage portion of your home owners policy covers damage to your home from natural disasters and peril, including vandalism, theft, fire, lightning, tornadoes, windstorms, hail, smoke, and explosions.

What is medical payments insurance?

Medical payments coverage, also known as MedPay, covers medical expenses for anyone accidentally injured on your property, regardless of who is at fault. It does not apply to you or members of your family who live with you.

What is actual cash value?

Actual cash value, also known as ACV, describes what it would cost to replace your home after depreciation has been factored in.

Depreciation is usually calculated by establishing the life of the item and then determining what percentage of that life remains. This percentage is multiplied by the replacement cost to determine actual cash value.

What is replacement cost coverage?

Replacement cost, also known as replacement value, describes what it would cost to replace your home at the present time, based on its current (pre-loss) worth.

What is the deductible?

Your home owners insurance deductible is the amount you pay out of pocket for covered damage before your insurance kicks in. For example, if your home insurance claim is approved for $6,000, and your deductible is $1,000, your insurance company will pay the remaining $5,000 after you pay your deductible.

If you don't know how much your deductible is, check your declarations page or call your insurance agent to find out.

What is a declarations page?

A declarations page, also known as a declaration page or dec page, is usually the first page of a new policy and includes important policy information, such as:

  • Your name and policy numbe
  • The location of your home
  • The value and replacement value of the property you're insuring
  • The start and end dates of your policy
  • The amounts and limits of your insurance coverage
  • Your deductibles and premium amount
  • Escrow information (if you have a mortgage company paying your premium)

Claims explained

How do I make a claim on my home insurance?

When it comes to filing a claim on your home insurance, the more documentation you can provide, the better — and the faster the claims process will be.

You'll need to begin by filing a claim form, which will document what was damaged or lost, the value of the property, and the circumstances of the loss. An adjuster will follow up to investigate the claim.

If you have any additional documents, like a police report, medical report, or any receipts for items that were lost, those could help you save time as well.

How long will it take to process my home owners insurance claim?

It depends on the complexity of the claim, the seriousness of damages or injuries, and the willingness of other involved parties to cooperate.

Generally speaking, simple claims can be settled in a matter of weeks, but more complicated claims may take much longer — especially when several estimates are needed. However, since every claim is different, determining an exact amount of time is difficult. Your best bet is to provide all the information you can, then be patient.

Will filing a claim affect my home insurance rate?

Many people believe that filing a claim will cause their rates to go up, but the fact is that when it comes to home owners insurance, claims don't always dictate the premium.

Home insurance focuses more on the region that you live in. Your premium will be largely determined by the number of catastrophes your area has suffered in the past few years, the potential risk in your area, the type of home you live in, and the amount of coverage you buy. Home owners insurance premiums are usually raised for a given region, not individually, and insurance companies can only submit rate increases once per year.

When I file a home insurance claim, do I need to contact the police?

If your loss involved theft or burglary, in addition to reporting the claim to your insurance company, you should report the incident to the police. This will help expedite your claim down the road.