{"id":24575,"date":"2026-04-27T13:36:29","date_gmt":"2026-04-27T13:36:29","guid":{"rendered":"https:\/\/incredipros.com\/?p=24575"},"modified":"2026-04-27T13:36:29","modified_gmt":"2026-04-27T13:36:29","slug":"what-does-homeowners-insurance-cover","status":"publish","type":"post","link":"https:\/\/incredipros.com\/?p=24575","title":{"rendered":"What Does Homeowners Insurance Cover?"},"content":{"rendered":"
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Ahhhh. Home sweet home. There\u2019s nothing like that feeling after coming home after a long trip away. Or that moment you get the keys to your first house and you walk through the front door, lay down, and do snow angels on that plush living room carpet (weird, but we get it).\n <\/p>\n

But now that the new-home smell has worn off, it might be time to double-check your homeowners insurance coverage. Or maybe you\u2019re getting homeowners insurance for the first time and you\u2019re wondering,\u00a0How much do I really need? And what does homeowners insurance cover?<\/em>\n <\/p>\n

Homeowners insurance can be confusing. If your basement floods, are you covered? Or what if a tornado sweeps through your neighborhood and pulls your roof off? Are you on the hook for the repairs?\n <\/p>\n

Never fear! We\u2019ll explain what a standard homeowners insurance policy actually covers in plain English so you know if your biggest asset is protected.\n <\/p>\n

Let\u2019s dig in!\n <\/p>\n

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What Is Homeowners Insurance?<\/h2>\n

Homeowners insurance\u00a0is financial protection for your home and personal belongings in case they\u2019re damaged or destroyed. It\u2019s a way to transfer risk to an insurance company to avoid budget-busting events.\n <\/p>\n

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\u00a0Home and auto insurance aren\u2019t just about low rates\u2014they\u2019re about the right coverage level. Talk to a trusted pro who can help you get both.<\/p>\n<\/p><\/div>\n

Having the right amount of homeowners insurance can make a huge difference in you reaching your financial goals. For most people, their home is their biggest investment. So the last thing you want is to be underinsured. But you also don\u2019t want to pay extra for the coverage you need.\u00a0\n <\/p>\n

Homeowners Insurance Definition<\/h3>\n

Homeowners insurance\u00a0is a type of\u00a0property insurance\u00a0that helps pay for your home to be rebuilt or repaired and your possessions replaced if these are damaged in a covered event like an accident, natural disaster or fire. It will also pay for medical bills and lawsuit costs if someone is injured on your property (think Fido biting the mailman or other injuries).\n <\/p>\n

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Types of Homeowners Insurance Policies<\/h2>\n

Insurance policies for people who live inside (as opposed to people who live in, you know, trees) are divided into eight different types of policies named HO-1, HO-2, etc., all the way to HO-8. Ranging from low coverage to high coverage, they\u2019re also sorted by dwelling type (aka house, condo, etc.) and whether you own it or rent it.\n <\/p>\n

Most insurance companies only sell HO-3 policies to single-family homeowners, but here\u2019s the full list:\n <\/p>\n

HO-1 and HO-2: <\/strong>These offer only bare-bones coverage\u2014much less than what you would generally want if you owned a home.\n <\/p>\n

HO-3<\/strong>: This is the most common type of policy homeowners select. It provides the standard level of coverage for your dwelling and personal property. Your personal property is protected up to a limit (usually 50% of your dwelling coverage).\n <\/p>\n

These policies typically come with actual cash value (ACV) coverage for all your stuff in your home. This means you get paid what your stuff is worth at the time it was damaged or destroyed (aka the used value which includes depreciation). Not ideal.\n <\/p>\n

HO-4<\/strong>: This is\u00a0renters insurance. It covers everything the renter owns and offers personal liability coverage in case anyone is injured on the property.\n <\/p>\n

HO-5<\/strong>: Along with HO-3, this is the other policy that a single-family homeowner would buy. These policies offer the highest levels of coverage and are more expensive. But they\u2019re worth it because if your home and belongings are ever destroyed, you\u2019ll be starting over, and you\u2019re going to need all the help you can get.\n <\/p>\n

With this kind of policy, you\u2019ll get replacement cost value (RCV) coverage which means your insurance will pay whatever it costs to replace your stuff. You may also be able to find a policy that has guaranteed replacement cost value\u2014which is like RCV for your house structure.\n <\/p>\n

HO-6: <\/strong>This is\u00a0condo insurance. It covers your unit\u2019s walls, floors and ceilings plus everything else a typical HO-3 policy covers, like liability and personal property.\n <\/p>\n

HO-7: <\/strong>Folks who live in a\u00a0mobile home or manufactured home need this kind of policy. Coverage usually only applies when your home is not moving.\n <\/p>\n

HO-8<\/strong>: This policy is designed to cover the proud owners of a historic home. They\u2019re expensive because old homes fall apart a lot, and repairs require special expertise and materials. It also provides the other typical coverages, like liability and personal property.\n <\/p>\n

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What Does Homeowners Insurance Cover?<\/h2>\n

Like most\u00a0types of insurance, homeowners insurance is not just one overarching policy that protects you against anything that could happen. In reality, there\u2019s an almost endless number of ways to customize your homeowners policy.\n <\/p>\n

That\u2019s why knowing the basics of coverage is so crucial. It\u2019s the first step toward getting the right amount of coverage. (And if you\u2019re wondering what your current coverage looks like, check out your\u00a0insurance declaration page\u00a0to see a breakdown of your policy.)\n <\/p>\n

So, what does home insurance cover?\n <\/p>\n

6 Types of Home Insurance Coverage<\/h3>\n

A standard homeowners insurance policy addresses five things:\n <\/p>\n

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  1. Dwelling<\/li>\n
  2. Other Structures<\/li>\n
  3. Personal Property<\/li>\n
  4. Loss of Use (Additional Living Expenses)<\/li>\n
  5. Personal Liability<\/li>\n
  6. Medical Payments<\/li>\n<\/ol>\n

    Here\u2019s a look at how each part works to provide you a solid foundation of protection. (To get the full picture of what kind of home insurance coverage is available, check out our\u00a0Homeowners Insurance Guide.)\n <\/p>\n

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    Dwelling Coverage<\/h2>\n<\/p>\n

    Dwelling coverage pays to repair or rebuild your dwelling (aka your house and anything attached to it) due to\u00a0damage from disasters\u00a0(also known as\u00a0hazards), like:\n <\/p>\n