Protection

Home Insurance: What's Covered, What Isn't

Home insurance covers sudden, accidental damage — not wear-and-tear, maintenance, or excluded perils. Knowing the difference prevents denied claims.

Quick answer

A standard HO-3 policy covers the structure, personal property, liability, and additional living expenses. Flood, earthquake, and gradual leaks are excluded and require separate coverage.

At a glance

Avg US premium: $2,377/yr (2025)
Most common policy: HO-3 (special form)
Typical deductible: $1,000–$2,500
Wind/hail deductible: 1–5% of dwelling coverage
#1 claim type: Wind & hail (~40%)
#1 denied cause: Gradual / maintenance damage

The six coverages in an HO-3 policy

Coverage A — Dwelling: the structure itself
Coverage B — Other structures: fence, shed, detached garage (usually 10% of A)
Coverage C — Personal property: belongings (usually 50–70% of A)
Coverage D — Loss of use: hotel + meals during repair
Coverage E — Liability: if someone is hurt on your property
Coverage F — Medical payments: small medical bills regardless of fault

What's almost always excluded

Flood (separate NFIP or private policy)
Earthquake (separate policy)
Mold (often capped at $5k–$10k)
Wear-and-tear, age, or maintenance damage
Sewer backup (rider needed, ~$50–$100/yr)
Service line damage (rider needed)

Replacement cost vs actual cash value

Replacement cost (RCV) pays to replace damaged property at today's prices. Actual cash value (ACV) pays only depreciated value. RCV is almost always worth the small premium difference — especially for roof coverage on older homes.

Many carriers now write roof coverage as ACV-only for roofs 15+ years old. Check this before your next renewal.

Wind/hail deductibles are separate

In many states, wind/hail damage has a percentage deductible (1–5% of dwelling coverage), not a flat dollar amount. On a $400,000 dwelling, that's $4,000–$20,000 out of pocket per event.

Related calculators

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Frequently asked questions

How much home insurance do I need?

Dwelling coverage should equal full rebuild cost (not market value) — use your insurer's replacement cost estimator. Personal property is typically 50–70% of dwelling. Liability should be at least $300,000, or higher if you have significant assets.

Is flood covered by home insurance?

No. Flooding requires a separate NFIP or private flood policy. Many homeowners outside FEMA flood zones still benefit — about 25% of NFIP claims come from low-risk zones.

What is dwelling coverage?

The amount your insurer will pay to rebuild your home if it's destroyed. Should reflect current local rebuild cost per sq ft — usually higher than market value in older neighborhoods.

How can I lower my home insurance premium?

Raise your deductible, bundle with auto, install smart leak sensors and a monitored alarm, replace aged roof, and shop carriers every 2–3 years. Loyalty rarely pays in insurance.

Does home insurance cover roof replacement?

Only if damage is from a covered peril (wind, hail, fallen tree) — not age. Many policies on older roofs pay only ACV (depreciated value), which can leave a large out-of-pocket gap.

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