What does homeowners insurance actually cover?
A standard HO-3 policy covers your dwelling and personal property against most perils, but it has important exclusions every homeowner should know about:
- Dwelling coverage: Pays to repair or rebuild your home's structure after covered events like fire, wind, hail, or vandalism. Insure to 100% of replacement cost, not market value.
- Personal property: Covers your belongings — furniture, electronics, clothing — if damaged or stolen. High-value items like jewelry may need a separate rider.
- Liability: Protects you if someone is injured on your property and sues. Standard policies include $100K–$300K; umbrella policies extend this further.
- Flood and earthquake: Not included in standard policies. If you're in a flood zone or seismic area, separate policies are essential.
When to shop your home insurance
Your home insurance renews annually and rates shift every year. Shopping every 12–24 months is the simplest way to avoid loyalty penalties. Carriers frequently offer new-customer rates that are 15–30% below renewal pricing for the same coverage.
