What is covered by homeowners insurance

Key Takeaways. Homeowners insurance policies generally cover destruction and damage to a residence's interior and exterior, the loss or theft of possessions, and personal liability for harm to others. Three basic levels of coverage exist: actual cash value, replacement cost, and extended replacement cost/value.

What two things are not usually covered by homeowners insurance?

Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered. Damage caused by smog or smoke from industrial or agricultural operations is also not covered. If something is poorly made or has a hidden defect, this is generally excluded and won't be covered.

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

A standard policy includes four key types of coverage: dwelling, other structures, personal property and liability. If your home is damaged by a covered event, like strong winds, dwelling coverage can help pay to repair it.

What is the most common homeowners insurance claim?

Wind and hail are the most common reasons for homeowners insurance claims, accounting for 45.5% of claims filed in 2020. Other common claims include fire, water damage, theft and injury.