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What Does Homeowners Insurance Cover? 2026 Guide to Perils and Exclusions
By the PolicyZen Team · Updated March 2026 · 9 min read
Most homeowners know they have insurance — but fewer than half could accurately describe what it covers. Until a claim is denied, the details feel academic. But knowing what your policy covers before a storm, fire, or water damage event is what determines whether you're protected or holding a $50,000 repair bill with no backup.
A standard HO-3 homeowners policy covers your dwelling on an open perils basis (everything is covered unless specifically excluded) and your personal property on a named perils basis (only covered against the perils specifically listed). This distinction matters: a covered peril for your house may not be covered for your belongings.
Covered vs. Excluded: Quick Reference
| Peril / Cause of Loss | Covered? | Notes |
|---|
| Fire and smoke | YES | One of the most common claims; both dwelling and contents |
| Lightning | YES | Including power surge damage from direct strike |
| Windstorm and hail | YES | Often a separate deductible (1–5% of dwelling value) |
| Theft and vandalism | YES | Contents limits apply; high-value items need scheduled riders |
| Burst pipes / accidental water discharge | YES | Sudden and accidental — not gradual leaks or wear |
| Falling objects (tree on roof) | YES | Damage to the dwelling covered; often not the tree removal itself |
| Weight of snow/ice | YES | Roof collapse from snow load |
| Flood | NO | Requires separate NFIP or private flood policy |
| Earthquake | NO | Requires separate earthquake policy (CEA in CA) |
| Sewer/drain backup | NO* | Excluded by default; endorsement available (~$50–$200/yr) |
| Mold | MAYBE | Covered if caused by a covered peril; excluded if from neglect/gradual damage |
| Foundation/settling | NO | Gradual damage and earth movement excluded |
| Power outage food spoilage | MAYBE | Some policies include; often excluded or sub-limited |
| Home business property | NO | Very limited coverage; business endorsement needed |
| Jewelry, art, collectibles | LIMITED | Sub-limits apply ($1,000–$2,500 for jewelry); schedule for full value |
The Four Coverage Components
- Dwelling (Coverage A): The structure itself — walls, roof, attached garage. Should equal replacement cost, not market value.
- Other structures (Coverage B): Detached garage, fence, shed — typically 10% of dwelling coverage.
- Personal property (Coverage C): Contents — furniture, clothing, electronics. ACV by default; replacement cost costs extra but is usually worth it.
- Loss of use / ALE (Coverage D): Hotel and living expenses while your home is being repaired — typically 20–30% of dwelling coverage.
- Liability (Coverage E): Injury or property damage to others — standard $100,000; increase to $300,000–$500,000 and add an umbrella policy.
- Medical payments (Coverage F): Minor medical expenses for guests injured on your property — typically $1,000–$5,000 regardless of fault.
Frequently Asked Questions
What perils does a standard homeowners policy (HO-3) cover?
A standard HO-3 policy covers your dwelling on an open-perils basis (all risks except those specifically excluded) and personal property on a named-perils basis (only the listed perils). Common covered perils include fire, lightning, windstorm, hail, theft, vandalism, and accidental water discharge from plumbing. Major exclusions include flood, earthquake, and normal wear and tear.
Is flood damage covered by standard homeowners insurance?
No. Flood damage is explicitly excluded from standard homeowners policies. Separate flood insurance must be purchased — typically through the National Flood Insurance Program (NFIP) or a private flood insurer. Even a few inches of flooding can cause tens of thousands of dollars in damage, so flood insurance is important for many homeowners beyond just those in high-risk zones.
Are earthquakes covered by homeowners insurance?
No. Earthquake damage is excluded from standard homeowners policies. Separate earthquake insurance is available and is particularly important in seismic zones like California, the Pacific Northwest, and parts of the central US. Earthquake insurance carries its own deductible, often 10–20% of the dwelling coverage amount.
What is the difference between a named-perils and open-perils policy?
A named-perils policy only covers losses caused by the specific perils listed in the policy. An open-perils (or 'all-risk') policy covers all perils except those explicitly excluded. Open-perils coverage is broader and generally preferred — standard HO-3 policies use open-perils for the dwelling but named-perils for personal property.
What are the main components of homeowners insurance coverage?
A standard homeowners policy has four main coverage components: (1) Dwelling coverage — the structure of your home; (2) Other structures — detached garages, fences; (3) Personal property — your belongings; and (4) Liability — protection if someone is injured on your property. Loss of use coverage (additional living expenses) is also typically included if your home becomes uninhabitable after a covered loss.
Know Exactly What Your Homeowners Policy Covers
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