What Home Insurance Actually Covers (and What It Doesn’t)
Homeowners insurance is one of the most important financial protections you have—yet many people don’t fully understand what their policy actually covers. Misunderstandings often lead to frustration during claims, unexpected out-of-pocket costs, or big gaps in coverage.
Below is a clear guide to what a standard home insurance policy covers—and what it doesn’t.
What Homeowners Insurance Does Cover
1. Your Home (Dwelling Coverage)
This protects the structure of your home—walls, roof, floors, built-ins, plumbing, electrical, and more. Covered losses typically include:
Fire
Wind or hail
Theft
Vandalism
Weight of snow/ice
Burst pipes
Dwelling coverage should equal the full cost to rebuild your home, not its market value.
2. Personal Property
Your belongings are protected against covered causes of loss—everything from furniture and electronics to clothing and appliances. You can choose:
Actual Cash Value (ACV): depreciation deducted
Replacement Cost Value (RCV): today’s price, no depreciation
Most homeowners benefit from replacement cost coverage.
3. Liability Protection
If someone is injured on your property—or if you accidentally damage someone else’s property—your liability coverage can help pay for:
Medical bills
Lost wages
Legal fees
Settlements
This is one of the most important (and inexpensive) parts of your policy.
4. Additional Living Expenses (Loss of Use)
If your home becomes uninhabitable after a covered loss, this helps pay for:
Hotel stays
Short-term rentals
Meals
Storage
Extra commute costs
This ensures you can maintain your normal lifestyle while repairs are made.
What Home Insurance Does Not Cover
1. Flood Damage
Standard home insurance does not cover flooding. A separate flood policy is needed.
2. Earth Movement
Earthquakes, sinkholes, and earth shifting are excluded unless you add optional coverage.
3. Wear and Tear
Insurance covers sudden and accidental damage—not maintenance issues like:
Aging roofs
Plumbing deterioration
Pest damage
4. Certain High-Value Items
Jewelry, collectibles, and fine art may require scheduled coverage beyond basic personal property limits.
5. Sewer/Water Backup
This is one of the most common claims and typically requires a low-cost endorsement.
Final Thoughts
Understanding what your policy covers—and what it doesn’t—is the key to protecting your home and your financial future. If you’re unsure whether your current protection is sufficient, Cameron Insurance Agency can help you review your coverage and fill any gaps.