Home Insurance: Are You Covered?

By Insurance.com Posted : 03/08/2007

Severe weather can pose a major threat to your home and property. Tornadoes, earthquakes, hurricanes, winter storms, severe thunderstorms, and flooding can damage or destroy your home in a matter of minutes. And while you can't control the weather, you can be prepared.

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Specific types of severe weather tend to occur in specific regions at specific times during the year. But it is important to recognize that this is not an absolute. For example, tornadoes are not restricted to the Plains states – each of the 50 states has experienced at least one tornado in recorded history. Thunderstorms occur throughout the fall and winter months, in addition to the typical summer outbreaks. Make sure your homeowners insurance is adequate, no matter where you live.

Preparing for the worst
If disaster does strike, homeowners insurance will be important to help get you back on your feet. Check your policy now, and make sure you understand your coverage. Certain events and disasters are not covered under a standard homeowners policy. You'll have to buy separate insurance if you need to protect your property against floods or earthquakes, for example. But it's better to know that before the fact, rather than after.

Generally speaking, homeowners insurance provides three things:

  • coverage for damage to your home
  • coverage for damage to your personal property
  • liability protection

The most common homeowners insurance policy in the United States is known as the homeowners-3 policy or HO-3. If you have this policy, you will be covered for everything except the exclusions outlined in the policy (more on that later).

What is covered

The most common perils for which you will generally be covered under an HO-3 policy include:

  • fire and smoke
  • lightning
  • tornadoes and windstorms
  • hail
  • explosions
  • vandalism
  • theft
  • damage from vehicles
  • falling objects
  • loss of food in your refrigerator or freezer due to power outage outside your home (usually up to $500)
  • weight of ice, snow, and sleet (except to fence, pavement, patio, swimming pool, or dock)
  • accidental discharge of water from plumbing system (i.e. pipe bursts) or freezing of plumbing
  • accidental cracking of your hot water heating system
  • accidents resulting from your negligence on or off your property (includes damages award to third party, medical bills of third party, and your legal costs – up to policy limit)
  • your personal property anywhere in the world (with some exceptions)

Remember, this list is not exhaustive. If it's not in the list of exclusions, it's covered.

What is not covered

Specifically, the HO-3 policy does not generally cover:

  • floods (flood insurance must be purchased separately from the federal government)
  • earthquakes (can be added to policy)
  • war
  • nuclear accidents
  • structures used for a business (separate insurance is necessary)
  • wear and tear on the home, including deterioration, insect and rodent infestation, settling or cracking of foundation or pavement, and damage from domestic animals
  • intentional damage
  • freezing of pipes in an unoccupied or under-construction house
  • theft from a house under construction
  • vandalism to a house that has been vacant for more than 30 days
  • cars, trucks, vans, motorcycles, aircraft, and boats with anything more than a small motor
  • property belonging to tenants
  • pets, birds, and fish
  • losses resulting from the failure to protect property after a loss

What it all means

Listed out, these disasters and other situations can be hard to distinguish. Instead, real-life examples are often much easier to understand. (These examples relate to HO-3 policies in general. Check with your insurance company for details on your policy.)

Your house...

  • Lighting strikes a power line leading into your house and starts a fire – you're covered
  • A delivery truck careens off the road and smashes into your house – you're covered
  • A plane blows up mid-air and part of the debris hits your house – you're covered
  • A pipe bursts in your cellar and covers your downstairs playroom with water – you're covered
  • Mice infest your home and chew up your insulation – you're not covered (wear and tear exception)
  • The river behind your house floods and you have water damage – you're not covered (flood exception)
  • The value of your home in the real estate market plummets because a prison is built on your block – you're not covered (selling cost has no direct relation to insurance, it is intended to cover the costs of rebuilding or repairing)
  • A foreign army invades the United States and destroys your home in the process – you're not covered (war exclusion)
  • You go on a cruise for 8 weeks and return home to discover vandals have smashed all your windows and torn apart your house – you're not covered (vandalism exclusion for house vacant more than 30 days)
  • Your home is damaged for some reason and you need to upgrade it to meet the local building codes when you repair it – coverage depends on the individual policy

Your personal property...

  • A wild animal gets into your house and rips apart your upholstery – you're covered, unless the animal is a rodent or your own pet, which is not covered (if the rodent or pet does something to cause a fire, you are covered for the damage caused by the fire.)
  • A thief breaks into your home while you are at work, and steals your entire music collection, the family silver, and everything else portable – you're covered, up to the limits stated within your policy and any endorsements
  • Your golf clubs are stolen form the trunk of your car – you're covered (without a replacement cost endorsement you will recover only their current value)
  • A fire damages your computer equipment in your business over the garage – you're not covered (you need special coverage for your home-based business)

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