What does homeowners insurance cover in a typical property damage claim?

Quick answer: A standard homeowners policy typically covers sudden and accidental damage to the dwelling structure, attached structures, and personal property from named causes such as fire, wind, hail, theft, and vandalism. Flood and earthquake are not included.

A standard homeowners insurance policy is designed to protect you against sudden and accidental losses from a defined set of causes, often called covered perils. The most commonly covered perils include fire, lightning, windstorm, hail, explosion, theft, vandalism, and certain types of water damage from internal sources such as a burst pipe. If your home or belongings are damaged by one of these causes, the policy can help pay for repair or replacement after your deductible is applied.

Coverage is typically organized into several components. The dwelling portion covers damage to the physical structure of your home, including the walls, roof, floors, and built-in fixtures. Other structures coverage extends to detached garages, fences, and similar outbuildings on the property. Personal property coverage applies to your belongings, including furniture, clothing, electronics, and appliances, whether they are damaged at home or, in many cases, away from home. Liability coverage and medical payments coverage address injury or property damage that occurs on your property or is caused by a household member.

There are important exclusions in a standard policy that homeowners are often surprised to learn about. Flood damage is not covered under a standard homeowners policy and requires a separate flood insurance policy. Earthquake damage is also excluded and requires a separate endorsement or policy. Routine maintenance issues, gradual deterioration, and mold resulting from neglect are generally not covered.

Personal property coverage may be written on an actual cash value basis, which factors in depreciation, or on a replacement cost basis, which covers the cost to buy a comparable new item. The difference in how your policy values property can significantly affect the amount you receive in a claim, so it is worth reviewing your policy terms with your agent before a loss occurs.