Homeowners Guide: What Does Homeowners Insurance Cover?

If you own a home, investing in homeowners insurance is a must–especially if you’ve got a mortgage on your property. 

Homeowners insurance protects you against a wide range of potential damages, and every policy is different. Your coverage depends on the specifics of your policy, but there are a few common threats most homeowners insurance plans shield you from. 

To better understand what protections standard homeowners policies feature, let’s dive into a few of its most common coverage types.

Standard Homeowners Insurance Policy Coverages

Though their specifics may differ from one policy to the next, standard homeowners insurance plans protect your finances against the same basic threats. These typically include dwelling coverage, other structures coverage, personal property coverage, liability coverage, and loss of use coverage with optional add-ons if you want additional protection. 

Dwelling Coverage

Dwelling coverage provides financial assistance to offset the cost of rebuilding a home if it’s damaged or destroyed. It covers costs associated with foundation repairs, structural repairs, and appliance replacements. 

Generally speaking, if your home is unable to function properly as a result of damages, dwelling coverage will be able to help. You can opt for different levels of coverage within your policy, and it’s recommended that you purchase enough insurance to finance a complete rebuild of your home in case of a fire, tornado, or similar disaster.

Note that dwelling insurance doesn’t cover your possessions. 

Other Structures Coverage

Another component of homeowners insurance is other structures coverage. This insurance type covers any destruction and damage to buildings on your property separate from the main home. Structures typically protected under this coverage include garages, gazebos, sheds, and more.

The amount of other structures coverage you should obtain will vary depending on your situation, so it’s best to speak with your insurance agent to figure out the best option for you.

Personal Property Coverage

This coverage type insures the personal possessions you keep inside your home if they’re damaged by theft, fire, or a similar circumstance. You may have the option to extend personal property coverage to include any possessions outside of your home as well because they might not be covered otherwise. 

To see what your policy covers and whether you can expand it to include outdoor property, it’s best to speak with your insurance agent.

Liability Coverage

Liability insurance covers injuries others sustain while on your property. For example, if your child’s friend gets injured while playing football in your backyard, your liability insurance will help cover legal fees if a lawsuit arises. 

It also covers damage to other peoples’ possessions while on your property. For instance, if your home floods and your friend’s gaming system is damaged, liability insurance will cover the damages. 

Loss of Use Coverage

If your home sustains damages that make it unlivable for you and your family, loss of use coverage can help offset any costs associated with temporary lodging if you’re displaced from your residence. 

It can also cover expenses related to damages if your policy includes extra protection.

Policy Add-Ons

While the coverages listed above are usually included in a homeowners insurance policy, other policy types may not come included with your plan. Fortunately, you’ll probably be able to add them if you need them.

Fine Art & Jewelry Insurance

Most homeowners insurance policies insure jewelry, artwork, and various collections under personal property coverage, but most will limit their coverage to 75% of the cost of your dwelling. If you have expensive artwork or valuables in your home, you may not recover their entire worth if damaged or stolen.

On the other hand, fine art insurance can help you recover a significantly greater portion of value lost no matter if your art is stolen, damaged or lost in transit, or destroyed in a natural disaster.

Flood Insurance

If your home is in a floodplain, you may want to consider investing in flood insurance. Typical homeowners insurance policies don’t cover damage due to these natural disasters, so if your home is affected, you’ll have to pay for the repairs out of pocket unless you add on this coverage type.

Identity Theft Insurance

You can also add identity theft insurance to your policy which covers some key costs if anyone steals your identity. And while identity theft may seem like an unlikely threat to require insurance protection for, it happens to more than a million Americans each year. 

What Isn’t Covered in a Homeowners Insurance Policy?

We’ve discussed what’s covered in a standard homeowners insurance policy and potential add-ons, so now let’s discuss what isn’t covered. 

Damages that result from a lack of regular maintenance aren’t protected in your insurance policy. For instance, if you neglect to change your damaged siding and water damage occurs, it likely won’t be covered. 

The same is true for general deterioration. For example, it won’t be covered if your HVAC system stops working because it’s constantly being used. You’ll have to pay for a new one out of pocket. 

Pest damage generally isn’t covered, either. So, if mice start chewing on the electrical wires in your home, you’ll likely have to pay for those repairs.

Looking for Homeowners Insurance in New Jersey?

If you’re looking for homeowners insurance–especially in the New Jersey area–look no further than Central Jersey Insurance Associates. We have a wide range of insurance offerings, from homeowners insurance to business insurance, flood insurance, and much more. 

As the top insurance agency in the Garden State, we’re confident that we’ll be able to set you up with the best policy that meets your needs. Contact us now to get the process started!