One of the greatest truths about home insurance is that coverage varies. It can vary by insurance company, by region, and even by individual policy. This is why it’s so important to know what’s in your policy. Knowing what your home insurance covers can help you figure out:
- What perils you’re protected against
- Where you’re still vulnerable.
- What policy is right for you.
The best way to get a handle on your home insurance is to sit down and read your policy. Believe it or not, it’s easier than it sounds, especially if you use this article as your cheat sheet!
What perils does homeowners insurance cover?
The purpose of home insurance is to protect the structure of your home, other structures on your property, and your personal possessions against loss or damage due to a claimable event (referred to as a peril). Depending on your provider, some or all of the perils listed below may be covered by your home insurance policy. Be sure you are completely aware of exactly what is and is not included in the policy you decide to purchase.
Theft
Should you be an unfortunate victim of theft or burglary, the damage to your home is covered by the main structure portion of your policy. The items that were stolen will be covered by the personal property cover, typically included in your home insurance policy.
It is common practice for personal property to have limits regarding pay-outs therefore it’s important to ensure you are adequately covered for the amount of your personal possessions – particularly high-value items. One way to do that is through a scheduled personal property endorsement.
Vandalism
Your home insurance will cover damage caused to your property and/or personal belongings as a result of an act of vandalism or malicious mischief.
Fire and smoke
Statistically, fire claims are the most expensive. If your home, other structures, or personal property are destroyed in a fire or severe smoke, your home insurance policy will likely repair, rebuild, or replace what's damaged.
Additionally, you may qualify for reimbursement of costs associated with finding alternative accommodation if you and your family are displaced as a result of such damage. This is known as loss of use coverage. Loss of use coverage may be included in your homeowners' insurance, or it may be an optional extra that you have to purchase with your homeowners' insurance.
Windstorms and hail
Damage caused as a result of windstorms and hail is typically covered. Should water or snow enter your property as a result of hail or windstorm damage, such loss or damage will also be covered.
Lightning
Damage caused by lightning strikes is covered. Some insurance providers may extend this coverage to power surges as a result of lightning which may damage electronic items for example.
Water damage
Sudden and accidental damage caused by burst pipes or water heaters is covered by most home insurance policies. It’s worth noting that damage due to wear and tear, unresolved maintenance issues, or defects is not covered.
Furthermore, damage as a result of water overflow from a sump pump or water backup from sewers or drains usually requires additional optional coverage. Damage due to floods also requires a separate flood insurance policy.
Falling objects
In the rare event that your home is damaged by falling objects, for example, a tree, it will be protected by your home insurance coverage.
Explosions and riots
Loss or damage caused by an explosion or a riot, for example from an aerosol can or a propane grill, may be covered by your home insurance.
Damage by a vehicle or aircraft
Whilst it may seem unlikely, it’s not impossible that your home and possessions could be damaged by a vehicle or aircraft crashing into it. Should this occur, most home insurance providers protect you against such loss or damage.
Weight of ice, snow, and sleet
Should your roof collapse due to heavy ice, snow, or sleet your home insurance will typically cover you for the damage to your home and Personal Property within your home.
The type of perils covered by a standard home insurance policy is broad and policies are not designed as one-size-fits-all. We recommend that you speak to your insurance provider to understand those situations where cover is not provided, such as damage from earthquakes and floods. Where necessary, tailor your insurance policy to meet your individual needs.
