Standard homeowners insurance typically covers your home’s structure, belongings, liability, and temporary living expenses after a covered loss, but it may not cover everything. Understanding what’s included, and what’s available as an add-on, can help you make more informed decisions about protecting your home, belongings, and finances.
What does a standard home insurance policy cover?
Coverage varies by insurance company, state, and policy form. Most homeowners insurance policies provide protection for the dwelling, personal property, liability exposures, and additional living expenses following a covered loss.
Standard homeowners insurance typically refers to one of several policy forms developed for residential properties, most commonly the HO-3 Special Form. Generally, it includes:
- Dwelling coverage for damage to the home’s structure caused by covered events such as fire, wind, hail, or theft
- Other structures coverage for detached garages, sheds, fences, and similar structures
- Personal property coverage for belongings inside the home
- Loss of use coverage if your home becomes temporarily uninhabitable following a covered loss
- Personal liability coverage if someone is injured on your property or you accidentally cause damage to another person’s property
- Medical payments coverage for minor injuries to guests, regardless of fault
For many homeowners, this coverage provides a strong foundation. But every property is unique, so it’s worth understanding where limits, exclusions, or gaps may exist and how optional coverages can help close them.
Learn more about the policy forms in our article “Which homeowners insurance policy is right for you?”
What additional protection does optional coverage offer?
Optional add-ons, often called endorsements or riders, let homeowners expand their protection for situations a standard policy may not fully cover. These can be especially beneficial if you own high-value items, live in an area prone to severe weather, or have made significant investments in your property.
Optional add-ons
Scheduled personal property coverage: Provides higher limits and broader protection for valuables such as jewelry, fine art, collectibles, and luxury watches that standard policies often limit.
Water backup coverage: Helps cover cleanup and repair costs when water backs up through a sewer, drain, or sump pump and damages a home or personal property.
Equipment breakdown coverage: Can help pay for repairs or replacement when household systems, smart-home technology, and appliances experience a mechanical or electrical failure.
Service line coverage: May help cover repair or replacement costs for underground water, sewer, electrical, or communications lines on your property.
Increased replacement cost coverage: Can provide additional protection if rebuilding costs exceed your policy’s dwelling coverage limit following a covered loss.
Identity theft and cyber coverage: Can help with expenses related to identity theft, cybercrime, and certain forms of online fraud.
How do I decide what type of home insurance coverage I need?
The right combination of coverage depends on your home’s features, your lifestyle, your risk level, and your financial goals. A newly purchased home with a finished basement, for example, may have different insurance considerations than a condominium, a waterfront property, or a home with valuable collections.
As you review your needs, consider:
- Do I own items that exceed standard policy limits?
- Could I cover unexpected repair costs for buried utility lines or water damage?
- Have renovations increased my property’s value?
- Do I regularly manage financial accounts and personal information online?
Your answers can help identify whether additional coverage may be appropriate, so you can tailor your policy to your home’s characteristics, belongings, and lifestyle.
How The Baldwin Group can help
As you navigate the homebuying process, The Baldwin Group can help you understand your insurance options, including what a standard homeowners policy covers and where additional coverage may be worth considering.
You’ll get personalized guidance to evaluate coverage options, identify potential gaps, and select protection tailored to your property, belongings, and lifestyle. Through our extensive network of highly rated national and regional insurance companies, you’ll have access to a broad range of coverage options and competitive pricing. Our technology-driven platform quickly compares coverage and pricing from multiple insurers, reducing surprises and streamlining the process.
The Baldwin Group’s personal insurance advisors most often see coverage gaps around water backup and scheduled personal property, two areas worth a second look for most homeowners.
Because homeowners insurance can play a role in mortgage approval and affordability, we help you find coverage that aligns with lender requirements. That support extends beyond closing, helping you choose coverage that fits your needs today and as they evolve.
To learn more about choosing homeowners insurance, read our recent article “Things to consider (and avoid) when buying homeowners insurance.”
Let’s work together to evaluate your homeowners insurance needs and build a coverage strategy that helps protect your home, belongings, and financial future.
FAQs
Does standard homeowners insurance cover flood damage?
No. Flood damage is generally excluded from standard homeowners policies and typically requires separate flood insurance.
Do I need water backup coverage if I don’t have a basement?
Water backup coverage can still be valuable even without a basement, since it applies to damage from sewer, drain, or sump pump backups anywhere in the home.
Are jewelry and collectibles covered under a standard policy?
Standard policies often cap coverage for high-value items like jewelry, fine art, and collectibles. Scheduled personal property coverage raises those limits.
Does homeowners insurance cover identity theft?
Not under a standard policy. Identity theft and cyber coverage is typically available as an optional add-on.
How do I know if my dwelling coverage limit is high enough?
If rebuilding costs could exceed your policy’s dwelling coverage limit, increased replacement cost coverage can help close that gap.
Is it legal to have two home insurance policies on the same home?
Yes, there’s no rule against it, but insurance companies generally don’t recommend it. You can’t collect the full claim amount from two insurers for the same loss—you’d file with one policy, subject to its limits and terms.
Can I switch homeowners insurance at any time?
Yes. There’s no rule requiring you to keep a policy for a full 12 months. You can cancel anytime, as long as your new policy is active before you cancel the old one.
This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. The Baldwin Insurance Group Holdings, LLC (“The Baldwin Group”), its affiliates, and subsidiaries do not guarantee that this information is, or can be relied on for, compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. The Baldwin Group does not guarantee any particular outcome and makes no commitment to update any information herein or remove any items that are no longer accurate or complete. Furthermore, The Baldwin Group does not assume any liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Persons requiring advice should always consult an independent adviser.
