What Does Homeowners Insurance Cover

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What does homeowners insurance cover | With home policies, the question what does homeowners insurance cover is an important one. Equally important however is to know what your policy does not cover. Often consumers are surprised to learn that they are not covered for a situation or scenario; the list of standard or typical exclusions is as important to understand as what is routinely covered. One of the characteristics of home coverage products is the availability of policy endorsements or insurance riders that allow the homeowner to build or tailor their own coverage. What does homeowners insurance cover and exclude by default, and what endorsements are available to improve on the standard offering?

what homeowners insurance covers

There follows an explanation and guide to what homeowners insurance covers in terms of the protection typically afforded and not covered by default. Home insurance claims are not an exact science, with adjusters having to determine qualification for claims in the first instance.

Although there are general rules or principles as we shall explain, the exact wording of a policy and specifics of a case including circumstances surrounding a claim may all impact the outcome. This means whether a claim is accepted or rejected and the amount of settlement.

First, let's be clear:

What Does Homeowners Insurance Cover Mean?

1. Cover (age) - areas of insurance protection. Separate coverage types make up the homeowners insurance package:

A. Dwelling
B. Other Structures
C. Personal Property (Contents Insurance)
D. Loss of Use/Additional Living Expenses
E. Guest Medical Payments
F. Personal Liability

2. Assets and Items - building, structures and belongings (as personal property).
3. Perils. Events or occurrences that may cause damage or loss to A. B and C.

What Does Homeowners Insurance Cover Re Perils?

Here we are focused on Perils - both qualifying causes of loss typically included and those typically excluded by default. Even the best most robust products have a long list of exclusions.

Covered perils depend on what policy form you have. However, by far the most commonly purchased policy, the Ho3 Special Form product provides:

  • Open Perils / All Risk Cover - For Dwelling and Structures (A. & B.)
  • Named Perils Cover - For Personal Property (C.)


While All Risk cover on the home sounds both comprehensive and impressive, in reality there is a long list of excluded events or occurrences that may cause you financial loss. While a few of these exclusions may be brought under coverage by means of endorsement, many circumstances remain uninsurable through regular homeowners insurance.

All Risk cover means anything - unless expressly excluded. View chart:

What Does Homeowners Insurance Cover and What's Excluded

Homeowners Perils


As you can see in the above chart, even the popular Ho3 All Risk product expressly excludes by default a long list of perils. Although the premier Ho5 product extends all risk cover to both home and personal property, in practical terms, little advantage is gained.

See how cover may be extended through common ENDORSEMENTS


Sudden and Accidental - Causation and Resulting

Does Homeowners Insurance Cover Water Damage?

A frequently asked question is does homeowners insurance cover water damage? The answer depends on policy and circumstance. Water damage caused by leaking pipes, appliances or a leaking roof for example must be Sudden and Accidental. Homeowner policies are designed to cover problems that arise from non-negligence. Aging, wear and tear, deterioration and failure to maintain the home or fix a known issue are not covered.

 !  Distinction can be made between:

  • CAUSATION: Damaged item as the source or cause of the damage (e.g. pipe break or roofing failure) leading to:
  • RESULTING: Damaged items resulting from of a sudden and accidental overflow or discharge of water (e.g. your flooring or carpet)


Does homeowners insurance cover roof leaks?

In the above scenario, while damaged flooring will typically be covered, the cost to repair or replace the leaking roof for example will not be, assuming that the roof problem may be traced to or assessed to be an issue of aging, deterioration or lack of maintenance etc.

When might the roof or Causation Problem be covered?

  • Negligent workmanship proven, new material failure or sudden and accidental cause not traced as a general deterioration or maintenance issue.
  • When causation was the result of a covered peril (e.g. a windstorm causes a tree to crash onto the roof so allowing a leak).


What does homeowners insurance cover in the case of slow and unseen leaks?

What does homeowners insurance cover if there is no sudden and accidental circumstance? Often a homeowner is not aware of an issue until damage becomes apparent. In such case of a slow and unseen leak, the damage may not strictly be defined as sudden and accidental - however in most cases you will be covered for resulting damage as long as you report the problem on discovery in a timely fashion.

Adjusters and engineers can often tell if damage is fresh or most recent. A known or gradually worsening problem eventually claimed for, such as a growing ceiling stain water damage problem will not be covered.

Does Homeowners Insurance Cover Plumbing?

Allied to the matter of water damage, does homeowners insurance cover plumbing? By now you may know the answer. Broken pipes and plumbing problems inside the home will not be covered if the issue is held to be a maintenance, old age, general wearing, decay, corrosion or of deterioration causation etc.

If sudden and accidental causation is a factor (e.g. negligent plumber breakage or faulty parts installed) or if plumbing was proven damaged by another covered peril, then cover may be valid.

Does homeowners cover outside water lines and sewer lines?

Cost of repair is not covered unless some sudden and accidental non-negligent damage cause may be proven.

Does Homeowners Insurance Cover Termite Damage?

Does homeowners insurance cover termites? Generally no, since insurers consider this insect damage, occurring over time (not sudden and accidental) and a preventable maintenance related issue. Sudden and accidental collateral damage might be covered, for example where a support beam was destroyed by termites causing another part of the home to collapse. This comes back to the distinction between Causation and Resulting damage identified above.

Does Homeowners Insurance Cover Theft?

What if your possessions get stolen; Does homeowners insurance cover theft of personal property or belongings? Protection against the worrisome peril of theft is covered as standard even in the most basic form of homeowners as one of the key named perils.

Sometimes referred to as contents insurance, your personal property coverage protects your belongings wherever they may be. This includes at or around the home and away from the dwelling entirely, for example in your car or with you on holiday. Claims for losses occurring where the item is stolen away from the home are typically limited compared to home based losses.

Homeowners should also be aware that personal property is subject to category limits and in some cases per item claim limits. Dollar limits may be extended by option and there is also the option to schedule items of value.

Free Prices

Find carriers and see what quality Ho3 coverage costs on your home. Collecting free comparison quotes from a few insurers is the essential task for homeowners focused on saving. We've explained what does homeowners insurance cover in terms of the perils it protects against, but what does it cost? The insurance rating system means that quote shopping is necessary to determine how much any carrier will charge to insure your particular home under any coverage product. Base rates, the foundation of quotes are set with reference to the location of the home and policy limit required. Choice of insurer therefore impacts price quotes that may differ by hundreds of dollars for an identical coverage specification. The Ho3 form is the popular choice where the cost of premier form Ho5 premium is not justified. In this article we focused on what does homeowner insurance cover and exclude by default. Available endorsements relate to settlement approach, assets and items covered and further perils. Find carriers in your area and pick up free direct quotes for quality home policies today.

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