What are the main things homeowners insurance covers?

Six buckets: the dwelling itself, other structures like fences and sheds, your personal belongings, loss of use expenses if the home is uninhabitable, personal liability if you are sued, and small medical payments for injured guests. Each has its own limit on the declarations page.

What does homeowners insurance not cover?

The big exclusions are flood, earthquake, sewer backup, wear and neglect, mold beyond small caps, pests, and the extra cost of rebuilding to current building codes. Flood and earthquake need separate policies; sewer backup and ordinance-or-law gaps are closed with cheap endorsements.

Is my roof covered by homeowners insurance?

Yes, against covered perils like wind, hail, and fire — but watch the settlement basis. Many carriers now pay actual cash value on roofs older than 10 to 15 years, which can cut the payout in half. Leaks from age and wear are excluded as maintenance.

Does homeowners insurance cover theft away from home?

Yes — Coverage C follows your belongings anywhere, so a laptop stolen from your car or luggage taken from a hotel is a covered theft claim, minus your deductible. Sublimits still apply to categories like jewelry, cash, and firearms.

How much dwelling coverage do I need?

Enough to rebuild the house at current construction prices — your square footage multiplied by local rebuild cost per square foot, often $150 to $300 depending on region and finishes. Market value is the wrong number because it includes the land, which survives every disaster.

Insurance

What Does Homeowners Insurance Cover? The Six Buckets, the Perils, and the Exclusions

A plain-language tour of the six coverages in a standard home policy, the difference between named and open perils, and the exclusions that surprise people at claim time.

By FreeCalculators Editorial · Published 2026-04-08 · Updated 2026-08-21 · 5 min read · 1016 words

Ask ten homeowners what their policy covers and nine will say 'the house.' The real answer is six lettered coverages — A through F — each with its own limit, plus a page of exclusions that decides what never gets paid. Knowing what homeowners insurance covers, bucket by bucket, is how you catch a too-low dwelling limit or a missing endorsement before the claim that exposes it.

The six core coverages

The six coverages in a standard HO-3 policy, with typical limits
Coverage	What it protects	Typical limit	Example claim
A - Dwelling	The house and attached structures	Full rebuild cost	Fire guts the kitchen; rebuild paid
B - Other structures	Fence, shed, detached garage	10% of Coverage A	Storm flattens the fence
C - Personal property	Your belongings, anywhere	50-70% of Coverage A	Theft of laptops from your car
D - Loss of use	Hotel and meals while uninhabitable	20-30% of Coverage A	Nine months in a rental during rebuild
E - Personal liability	Lawsuits for injury or damage you cause	$100,000-$500,000	Guest slips on your stairs and sues
F - Medical payments	Guest injuries, no lawsuit needed	$1,000-$5,000	Neighbor's kid breaks an arm on your trampoline

The percentages are defaults, not ceilings. Coverage C at 50 percent of a $400,000 dwelling limit means $200,000 of contents coverage — more than most households need, but the sublimits inside it are what bite: theft of jewelry is commonly capped at $1,500 to $2,500 total unless you schedule pieces individually.

Named perils vs open perils

A standard HO-3 policy covers the dwelling on an open perils basis — every cause of loss except what the policy excludes — but covers your belongings only against a list of named perils. An HO-5 extends open perils to contents too, and usually costs only modestly more. The sixteen named perils on most policies:

Fire or lightning, and smoke damage
Windstorm and hail
Explosion, riot, and civil commotion
Damage from aircraft or vehicles
Vandalism and malicious mischief
Theft
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water from plumbing or appliances
Sudden tearing, cracking, or bulging of heating and water systems
Freezing of plumbing
Sudden damage from artificially generated electrical current

The exclusions that surprise people

Flood: rising water from outside is never covered — it needs its own policy. See flood and earthquake insurance.
Earthquake and earth movement: excluded everywhere; sold as a separate policy or endorsement.
Sewer and drain backup: excluded unless you add the water-backup endorsement, typically $40 to $100 a year.
Wear, neglect, and maintenance: a roof that leaks from age is your problem; only sudden damage is covered.
Mold: covered only when it results from a covered water loss, and usually capped at $5,000 to $10,000.
Termites, rodents, and pests: always excluded as preventable maintenance.
Ordinance or law: the cost to rebuild to current code is capped at 10 percent of the dwelling limit unless you buy more.
Home business equipment: capped around $2,500 on-premises — a real business needs its own policy.

How much of each coverage you actually need

Coverage A should equal the rebuild cost — local construction cost per square foot times your square footage — never the market value, which includes land that cannot burn down. Coverage C deserves a home inventory: walk each room with your phone camera once a year. Coverage E should at least match your net worth, because a judgment above the limit reaches your savings and future wages — and if your assets outrun $500,000, that is what umbrella insurance is for.

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