Homeowners Insurance what it Covers what it Excludes

Just like you need insurance to protect your vehicle from loss or damage, you need coverage to protect your home. That is where homeowners insurance comes in. However, just like your auto insurance policy, it is vital to know what your homeowners insurance policy covers, as well as what it does not.

What homeowners insurance covers:

Damage coverage – Damage to the physical structure.

Liability – If you or your family causes damage or injury to others on your property.

Medical payments – If people are injured on your property by a family member or family pet, unintentionally.

Loss of use – Covers your expenses if you cannot live in the home due to severe damage.

Basic property damage coverage may exclude certain items, may not be sufficient and/or require additional policies or addenda:

Boats, jet skis or similar “toys”.

Autos parked on or adjacent to the property.

Jewelry, artwork, guns, silver, antiques and computers.

Office or business related items -if operating a business from your home.

When it comes to your homeowner’s policy, there are some different things to note about replacement coverage versus actual cash value reimbursement. 

Replacement cost coverage accounts for the actual cost of materials needed to rebuild or repair your home, without deducting depreciation. Insurance policies generally require a homeowner purchase this coverage for at least 80 percent of the property’s fair market value.

In contrast, actual cash value covers property damage after depreciation is factored in. The type of coverage you choose, ultimately, depends on your needs and wants.

What homeowner’s insurance excludes:

Homeowners’ insurance covers many natural disasters and “Acts of God”. However, coverage usually excludes things like:



Landscaping damage

Termite infestation

Damage due to poor maintenance

Damage due to normal wear and tear

If you have questions, call your insurance provider and ask them to send out a claims adjuster to assess your specific coverage on any potential claim.

However, knowing what is covered in your policy alone, is still not enough. You need to update your coverage regularly, at least on an annual basis. Your home value changes, the costs of materials needed to rebuild or repair your home fluctuate, you may have accumulated more possessions or the valuables over time. In addition the items you already own may have increased or decreased in value. The insurance company cannot reimburse you for items you have not inventoried and priced prior to a disaster.

Homeowners insurance is a necessity. Make sure that yours is up to date so that your most valuable asset remains under the umbrella of complete protection.