Essential Home Insurance Coverages [Protect Your Castle]

Dwelling coverage – Coverage A

Dwelling coverage (Coverage A) is the backbone of your homeowners insurance policy. It protects the structure of your home, including the walls, roof, and foundation. This coverage also extends to any attached structures, such as a garage, carport, or deck. 

So if your home is destroyed by hail, lightning, a hurricane or any other peril your home insurance covers, your policy would kick in to pay for repairs after you meet your deductible. 

If you have a mortgage, your mortgage company will likely require you to have at least enough dwelling coverage to rebuild your property fully. (This is known as replacement cost coverage.) So, if it would cost $400,000 to rebuild a similar home to your current one, that should be your policy limit.

Other structures coverage – Coverage B

Home insurance also covers other structures on your property that aren't attached to your main house—like detached garages, gazebos, patios, sheds, pergolas, fences, and driveways. This is known as other structures coverage (Coverage B).

Similar to Coverage A, if any of these structures are damaged by a covered event—such as a fire or a falling tree—Coverage B can help pay to repair or replace it. 

The typical limit for other structures coverage is usually 10% of Coverage A. So, if your home is insured for $400,000, your other structures coverage would likely be around $40,000. 

Personal property coverage – Coverage C

Personal property insurance (Coverage C) is the part of your policy that covers your belongings, such as your furniture, clothing, electronics, appliances, and even the food in your fridge. 

The typical limit for personal property coverage is usually 50% to 70% of Coverage A. So, if your home is insured for $400,000, your personal property coverage may be between $200,000 and $280,000. 

This doesn’t mean your home insurance will reimburse you for any and all personal belongings up to this limit. There are usually sub-limits for more expensive or easily stealable items like jewelry, art, watercraft, electronics, cash, and collectibles. 

For example, jewelry usually has a $1,500 sublimit for your entire collection, not just one piece. So even if your policy includes $200,000 in personal belongings coverage, you’d get back up to $1,500 only for jewelry. 

Luckily, most providers have endorsements or riders you can add to your policy to increase homeowners insurance coverage limits for high-value items.

Additional living expenses/loss of use – Coverage D

Imagine this… a tornado rips through your home and leaves you and your family displaced for the next year while you rebuild. If you have Coverage D, it will help cover any additional living expenses you have while your home is unlivable. 

Also known as loss of use coverage, this part of your policy can help reimburse you for temporary housing costs, extra food expenses, and even pet boarding fees while you’re unable to live at home. This can take a huge weight off your shoulders as you focus on rebuilding your home. 

The coverage limit for additional living expenses coverage is usually 20% of Coverage A. So, if your home is insured for $400,000, your loss of use coverage would likely be around $80,000.

Personal liability coverage – Coverage E

Another type of home insurance coverage to know about is Coverage E — personal liability. This comes in handy if you or anyone in your household injures someone else or damages their property and is found liable. 

For instance, if your dog bites a stranger, your kid accidentally throws a ball through the neighbor’s window, or a guest slips and falls down your stairs, this homeowners coverage can help with the costs if they decide to sue. It can pay for court fees, hospital bills, court awards, pain and suffering, property damage and anything else you’re responsible for.

Your policy often comes with $100,000 to $500,000 in liability protection, and you purchase extra home insurance coverage if you need more. 

One thing to note is that liability coverage doesn't apply to any injuries that happen to you or anyone in your household. It’s just for people outside of your home. 

Medical payments – Coverage F

Medical payments are another home insurance coverage that can help pay for people who get injured on your property—even if you’re not at fault. It’s known as Coverage F and is for minor medical expenses only.

For example, if your mother is visiting and accidentally slips down your stairs and breaks her ankle, she may not have any plans to sue you because it wasn’t your fault. However, you may still want to help with her medical bills. In this case, you could use Coverage F to help her pay for X-rays, doctor visits, and medications up to your policy's limit. 

The typical limits for medical payments coverage are usually $1,000 to $5,000, so much smaller than your personal liability limits. There’s usually no deductible for this homeowners coverage, so you can use it right away. 

Additional homeowners insurance coverages for your home

In addition to the basic home insurance coverages above, many companies allow you to customize your policy with extra add-ons. The benefit is a more well-rounded homeowners insurance policy that better fits your needs. 

Here are some extra things home insurance can cover if you buy an endorsement or rider:

• Umbrella insurance extends the liability protection limits of all your insurance policies. So, if you have a home, boat, auto, and other insurance, it applies to all of them. This insurance coverage helps protect your assets if you're sued for a large amount.
• Ordinance or law coverage is ideal for older homes because it pays extra if your home needs to be “brought up to code” while it’s being rebuilt from a covered peril. 
• Equipment breakdown coverage pays to repair any systems or appliances in your home that stop working because of mechanical or electrical issues. It’s ideal if you want HVAC insurance or other coverage.
• Loss assessment coverage is for when you’re required to pay a claim that exceeds your homeowners association’s (HOA’s) master policy limits.
• Scheduled personal property coverage is great for any high-value items that exceed your standard policy limits. You can get jewelry insurance or extra coverage for art, collectibles, musical instruments, electronics, and other items. 
• Water backup coverage pays for damage caused by water backing up through sewers, drains, or overflowing from a sump pump.
• Service line coverage pays to repair or replace underground utility lines that service your home (like water, sewer, and electrical lines).
• Solar insurance protects your solar panels against damage from covered perils, as these may not be fully covered under your standard policy.
• Blanket insurance provides a single limit for your home, personal property, and other structures rather than separate limits for each type of home insurance coverage.

Need help deciding which optional home insurance coverages you need? Talk to a Hippo insurance agent to figure it out.

Homeowners policy coverage for perils

“Perils” are all the different events your home insurance may cover — like lightning, hail, wind, and theft. The most common type of home insurance policy provides open perils coverage for your dwelling (also known as hazard insurance) and named perils coverage for your belongings. 

• Open-perils coverage protects against everything except what’s specifically listed as an exclusion in your policy. For example, it may cover everything except floods and earthquakes.
• Named-perils coverage protects against only what’s specifically listed in your policy. For example, your policy may state 16 specific hazards it will cover and nothing else.

Some perils—like floods and earthquakes—are almost always excluded from standard homeowners insurance policies. If you know you need this type of coverage for your home, you may need to purchase separate catastrophe insurance. 

Still have questions?

Still confused about homeowners insurance coverages? Check out these frequently asked questions.

What are the four basic categories of coverage in homeowners policy?

Home insurance covers four basic things: your home’s physical structure, your personal belongings, your personal liability and extra living expenses. From there, you can tack on extra home insurance coverage for service lines, solar panels, business use, and more.

What are the three basic levels of coverage that exist for homeowners insurance?

Home insurance has three basic coverage limits you can choose from as you build your policy: actual cash value, replacement cost, and extended replacement cost. Actual cash value is the lowest coverage level. It covers only the depreciated value of your stuff. Replacement cost is mid-level. It covers the cost of replacing your stuff without deducting depreciation. Extended replacement cost is the highest level of coverage. It pays the full cost to rebuild, even if it’s over your policy limits.

Does home insurance cover wall cracks?

It depends on what caused the cracks. Home insurance won’t cover wall cracks resulting from settling, shifting, or poor construction. (These are considered maintenance issues). That being said, if your wall cracks are from a covered peril — like a sudden and accidental burst pipe or a severe storm — your insurance will likely pay for it up to your policy limits.

Which area is not protected by most homeowners insurance?

Typically, home insurance won’t cover damage from floods, earthquakes, or sewer backups. These types of disasters typically require separate catastrophe coverage. Also, your policy usually won’t cover regular wear and tear, pest infestations, or damage from a lack of maintenance. Read your specific policy to find out what is and isn’t included.

What are the different homeowners insurance types?

The eight main types of home insurance include HO-1 (basic coverage), HO-2 (named-peril coverage), HO-3 (most common coverage), HO-4 (renters insurance), HO-5 (the most comprehensive coverage), HO-6 (condo insurance), HO-7 (mobile home insurance), and HO-8 (modified coverage for older homes).