What Does Homeowners Insurance Cover?

A homeowners insurance policy covers your dwelling, external structures on your property, your personal property, and your personal liability.

A standard homeowners insurance policy is designed to protect you from the financial effects of common losses to homeowners. Here are the broad coverages a homeowners insurance policy provides:

Your dwelling

Dwelling coverage protects the building itself and any structures attached to it.

For guaranteed replacement coverage, your dwelling limit must equal the cost to fully rebuild, which may not be the purchase price.

Other structures

Other Structures coverage protects the structures on your property that are not attached to your dwelling, such as a detached garage, shed, or pool.

Most homeowners insurance policies automatically include Other Structures coverage up to a certain amount (e.g., 5–10%) of your dwelling coverage limit.

Personal property

Personal Property coverage protects items you own or use that are usually located at your home. Coverage can apply while you are anywhere in the world, but it is reduced if the property is kept in a storage unit.

Many policies automatically include Personal Property coverage up to a certain amount (e.g., 35–60%) of your dwelling coverage limit.

Some homeowners policies protect against specific perils named in the policy, while HO-5 policies protect against all perils except those specifically excluded.

Loss of use

Loss of Use provides coverage for expenses (like hotel, food, or laundry services) which are above your normal expenses, that you incur if you can’t live in your home because of a covered loss.

Most policies automatically include a percentage of your dwelling coverage limit for loss of use.

Personal liability

Personal Liability coverage responds to lawsuits alleging bodily injury or property damage for a covered occurrence. The policy can also cover your defense in court. This does not cover liability for motor vehicle accidents.

If you feel you need coverage, consider an umbrella policy.

Medical payments to others

Medical Payments to Others pays the medical bills for people if they get hurt on your property. This does not cover injuries to yourself or members of your household.

The information and descriptions on this site are general in nature. The coverage afforded for a particular loss depends on the specific facts and the terms, exclusions, and limits of the actual policy. Nothing on this site alters the terms or conditions of any policy, as the policy controls coverage. Coverage options, limits, discounts, deductibles, and other features are subject to underwriting criteria, state availability, and effective dates. Coverage provided and underwritten by NJM Insurance Company and its subsidiaries, 301 Sullivan Way, W. Trenton, NJ 08628.