What does homeowners insurance cover?

A homeowners policy bundles several coverages into one. Knowing what each part does — and what it doesn't — helps you ask the right questions before something goes wrong.

The core coverages

Dwelling coverage pays to repair or rebuild the physical structure of your home after a covered loss. Other structures extends that to detached things like a garage or fence. Personal property covers your belongings, and loss of use helps with extra costs (like a hotel) if you can't live at home during repairs.

Personal liability protects you if someone is injured on your property or you're responsible for damage, and it can include legal costs. Many policies also offer medical payments for minor guest injuries regardless of fault.

What's usually excluded

Standard homeowners policies generally exclude flood damage — that's purchased separately through the NFIP or private flood markets. Earthquakes are typically excluded too. Wear and tear, neglect, and certain high-value items (jewelry, art) beyond a sub-limit usually need to be scheduled separately.

Replacement cost vs. actual cash value

How a policy pays a claim matters as much as what it covers. Replacement cost pays to replace items at today's prices; actual cash value subtracts depreciation. An agent can explain which your policy uses and whether it's right for you.

Related coverage

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Frequently asked

Does homeowners insurance cover flooding?
No — flood is excluded from standard policies and is bought separately. Whether you need it depends on your location; an agent can help you weigh the risk.
Will my policy cover a home business?
Usually only minimally. Business equipment and liability often need a separate endorsement or commercial policy — worth confirming with an agent.

This guide is general educational information, not insurance advice. A licensed agent can apply it to your situation. Last updated June 2026.

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