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.

Disclaimer

The information provided in this article is for general educational and informational purposes only and is not intended to serve as professional advice. Home safety practices may vary depending on your property, location, and individual circumstances. Always consult qualified professionals regarding fire safety, home security, and maintenance needs.

Coverage descriptions in this article are not a guarantee of insurance benefits. Insurance policies, terms, and coverage options vary by state and individual policy. For specific details about your homeowners, condo, or renters insurance coverage, please refer to your policy documents or contact your insurance agent.

Cameron Insurance Agency, LLC and its representatives do not guarantee the prevention of loss, theft, fire, or property damage through the use of these tips. Implementing these suggestions is at your own discretion and risk.