What Home Insurance Covers — And What It Doesn’t

| December 18, 2012

tornado damaged house

There are a variety of ways to get home insurance, including online. The important thing is to know what’s covered and what is not.

Most home insurance policies offer property and liability protection. It’s important to understand what’s covered. Let’s take a look at what should be included in your home insurance policy and, if you need coverage, DexKnows can help you find insurance agents and brokers in your community.

What home insurance covers

A standard home insurance policy typically has six parts:

  • Dwelling
  • Other structures on your property
  • Personal property/contents
  • Loss of use
  • Personal liability protection
  • Medical payments

Property protection

Dwelling, other structures, personal property and loss of use all pertain to areas of insurance protecting your property. The dwelling typically is your home, as well as its wiring, plumbing, heating and attached structures. Air conditioning is included under “dwelling” if it’s permanently installed, such as central air, not a window unit.

Other structures include garages and storage sheds. There are also fences, sidewalks, patios and driveways. It is important to remember that if a detached structure is used for business purposes, such as a garage turned into an office, it may not be covered under your home owners insurance policy.

Personal property is exactly that, the contents of your home and other personal items that you and family members own. Policies either offer to replace them based on their actual cash value, which depreciates over time, or replacement cost.

If there’s a fire, storm damage or another event that means you can’t live in your home while repairs are being made, that’s where loss of use comes into the picture. Loss of use covers your living expenses.

Of note: not everything is covered under a personal property policy. Firearms, jewelry and artwork are examples of valuable property not covered under a typical policy. Ask your agent if you need to add on an endorsement to cover these items.

Liability protection

Personal liability and medical payments make up the liability protection portion of your policy.

Personal liability will kick in to cover your financial loss if someone sues you because of injuries or damages that take place on your property.

Medical payments covers the medical bills for people who are either hurt on your property or injured by your pets, such as a dog bite.

What’s not covered

Home insurance is important to have in case of an event like a fire or a guest getting injured on your property, but it doesn’t cover everything.

Here’s some typical exclusions:

Earthquake and water damage

If you live in an area prone to earthquakes, consider buying insurance as a separate endorsement or addendum. The same goes for flood insurance, though you will need to purchase that through the National Flood Insurance Program run by the federal government.

Maintenance issues

Home insurance policies may not cover home maintenance issues including damage caused by mold or if there’s damage caused by a leaking roof. That can also mean insect or rodent damage.

Ask your insurance agent if you need an endorsement to cover these areas. Also ask about damage caused by a water leak or backup from a sump pump or sewer system.

Home businesses

Consider taking out business insurance if you own a home business. Home insurance policies may not cover all business equipment and likely will not cover liability if someone’s injured as a result of a business run out of your home.

Home insurance tips

Medical payments can be costly if something happens on your property. Ask your agent what’s the typical liability coverage offered and whether what coverage you have is sufficient.

You also want to see if your insurance covers events related to you but not on your property, such as if your child runs over the neighbor’s rose bed with a bicycle or your laptop is stolen out of your car.

Make a home inventory list so if there is a theft or another peril or event, you know what you have to replace.

Follow these suggestions as you seek home insurance. If in need of a policy, look through DexKnows to find providers in your area.

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Category: Insurance

About the Author ()

Central Ohio journalist with 15 years experience at daily newspapers. Freelance writer and amateur photographer. Storytellers are my heroes, poets my idols and photographers my looking glass.