Avoid Dreaded Surprises: What Is Really Covered Under My Homeowner's Policy?

When you buy a home, your initial concern about your home insurance coverage is that it meets the requirements of your mortgage. For most people, that's the last time they think about their coverage until they need to file a claim. Avoid dreaded surprises and take a closer look at your home insurance policy before problems arise.

What does home insurance cover?

Typical home insurance coverage (level HO-3) protects the buildings on your property against certain types of damage and affords you personal liability coverage.

  • Damage. Your home and personal property are protected against fire, lightning, tornado and wind damage. Also covered are losses caused by vandalism, theft, riot and any flooding caused by indoor plumbing or air/heat conditioning systems.
  • Dwellings. In addition to your house (referred to as the “dwelling”), any structures on your property, such as the garage, are covered.
  • Contents. All contents, personal belongings and electronics stored inside your home are covered. However, if your personal possessions include expensive jewelry or art, you might want to purchase additional floater coverage for those items if their replacement costs are higher than your coverage allows.
  • Liability. You are covered for bodily injury or property damage whether you are negligent or not. Other home insurance coverage characteristics include medical payments to others up to a specified amount. “Medical payments” is designed to cover small medical bills while protecting you and your insurance company from potential lawsuits.
  • Other structures. Other structures covered are fencing around your property and detached buildings such as a barn, shed or pool house. Depending on your coverage, other structures might not be covered at 100 percent replacement value.
  • Uninhabitable. Should your home become uninhabitable and you are forced to live somewhere else during repairs, this situation is called “loss of use” and is included in most home insurance coverage. Limits for this expense depend on your policy.

How much home insurance do I need?

After you evaluate what your home insurance policy specifically covers, you'll have to decide if paying a higher premium by adding additional coverage for what it doesn't cover is worth it. You already know the basic coverage required by your mortgage holder. Any coverage above what you already have is your choice.

  • Replacement cost. Do an internal inventory of your possessions and consider what it would cost you to replace everything at current prices. Many homeowners are unexpectedly surprised that their policy doesn't offer replacement cost values. When you make a claim, everything will be assessed at fair market value, not at current replacement cost value. Items depreciate quickly, and unless your policy specifically covers replacement value, you'll be out-of-pocket for the difference.
  • Earthquake insurance. If your home is situated in an area where earthquakes are common, you will have to pay extra for damage that result from this natural disaster outside of your home. Do you want to take the risk?

There are many more home insurance coverage enhancements Safety offers. Check out our products for more information on our endorsements.

Please contact your independent agent if you have any questions on coverage.