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Home Insurance Basics: What It Covers (and What It Doesn't)
Short answer: A standard homeowners policy covers your home's structure, your belongings, liability if someone is hurt on your property, and additional living expenses if you can't live at home after a covered loss. It does not cover flood or earthquake damage — those need separate policies.
By CompareRatesHQ Editorial Team · Updated August 2026
The core coverages
- Dwelling — repairs/rebuilds the structure of your home after a covered event.
- Personal property — your belongings (furniture, electronics, clothes).
- Liability — legal and medical costs if you're responsible for someone's injury or property damage.
- Additional living expenses (loss of use) — hotel/food costs if a covered loss forces you out.
What's usually excluded
Standard policies typically exclude floods and earthquakes. Flood coverage comes from the NFIP or a private flood policy; earthquake coverage is a separate add-on. In high-risk regions these are important to consider. Normal wear and tear and maintenance issues are also not covered.
What drives your premium
Rebuild cost (not market value), location and local weather risk, the home's age and roof, claims history, and your chosen deductible and limits. Replacement-cost coverage costs a bit more than actual-cash-value but pays to rebuild without depreciation.
Getting an accurate quote
Have your square footage, year built, roof age, and any safety features (alarms, updated wiring/plumbing) handy. Comparing quotes from several insurers for the same limits is the best way to find a fair price.
Frequently asked questions
Does homeowners insurance cover floods?
No. Flood damage requires a separate flood policy through the NFIP or a private insurer.
Is home insurance based on market value?
No — it's based on the cost to rebuild your home, which can differ from its market or purchase price.
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