What’s Covered by Home Insurance (And What Isn’t)?
If you own a home, you need homeowner’s insurance to protect your investment. But many homeowners are uninformed about the types of damages that insurance will cover.
For instance, when Hurricane Harvey battered the Gulf Coast last year, leaving flooded homes in its wake, 80 percent of its victims did not have insurance coverage that included flood damage, according to USA Today.
Rather than leaving your home—and your financial situation—vulnerable to potential damages, it’s important to understand what’s covered by your home insurance (and what isn’t).
Standard home insurance policies include four types of coverage:
- Structural coverage. Your insurance will pay the cost to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters included in your policy.Standard policies do not pay for damage caused by a flood, earthquake or routine wear and tear. If you live in a flood zone or your property is at risk for other disasters, you may need to purchase additional coverage.
- Contents coverage. Homeowner’s insurance also protects the value of your personal belongings such as clothing, furniture, golf clubs, and other items inside the home. If your personal items are stolen or destroyed by fire, hurricane or other covered disasters, your insurance will pay to replace them. Even if your personal belongings are stolen or damaged while they are not at your home—such as in a hotel room while on vacation—your homeowner’s policy will pay to replace them within limits.
- Liability protection. In addition to your home and its contents, your home insurance protects you if someone sues you or your family members for property damage or bodily injury. In such a case, your insurance company will pay your legal fees, as well as the cost of any court awards.If someone is injured in your home, your policy includes no-fault medical coverage. This means your insurance company will pay the person’s medical bills directly and there’s no need for them to file a liability claim against you.
- Additional living expenses. If your home is so damaged from an insured disaster that you are unable to live there until repairs are completed, your insurance policy will pay for alternative living arrangements. Those expenses include hotel or rental bills, restaurant bills and other expenses, while your home is being rebuilt.