What Does Standard Homeowner’s Insurance Cover and Not Cover?

Home Blog What Does Standard Homeowner’s Insurance Cover and Not Cover?

August 15, 2024

Insurance is essential and can help pay for losses you experience. However, it doesn’t cover everything. With any type of insurance or standard policy, there are covered losses and coverage exclusions. It’s important to know what your insurance policy does and does not cover, and what endorsements or additional lines you need to get coverage for exclusions, before you’re in a situation where you need to file a claim. What does standard homeowner’s insurance cover and not cover? Here is what you need to know:

What Does Standard Homeowner’s Insurance Cover?

Standard, or broad form, homeowner’s insurance can vary by carrier and on a number of factors. Whether you are getting an insurance proposal for the first time or comparing insurance quotes, it’s important to make sure you know what the covered losses and coverage exclusions are under a specific policy.

It’s also important to note that a “standard” policy is not the end point of homeowner’s insurance. Coverage can be “added back” for additional perils or exclusions through endorsements or additional lines of coverage.

What Are Covered Losses?

Covered losses, or covered perils, refer to the financial losses for which an insurance company will provide financial reimbursement as determined by the terms of the corresponding insurance policy.

In the case of homeowner’s insurance, covered losses would describe the incidents that affect your home and cause financial loss that would be reimbursed, fully or partially, under the terms of your homeowner’s insurance policy.

Your insurance policy DEC page should clearly lay out policy information, including covered losses. Your insurance agent will be able to walk you through what your current policy or any potential new policies do and do not cover. They will also be able to advise on any endorsements or additional lines of coverage you may need to get coverage for any exclusions listed.

2 Main Coverage Types in Homeowners Insurance

In homeowners insurance, there are two main coverage types you may see – named peril policies and open peril policies.

Named Peril

In a named-peril homeowner’s insurance policy, covered losses are specifically listed and you are only covered against those specific perils. In the instance of a claim, you will need to be able to prove the property damage was caused by a named peril on your policy.

If you are unable to do so, your claim may be denied and you may not be reimbursed as it would not be considered a covered loss. This generally applies to the personal property section of your policy.

Open Peril

With an open-peril or all-risk homeowner’s insurance policy, you are considered covered against all losses except for the specific coverage exclusions on the policy. With an open perils policy, it would be up to your insurance company to prove the damage falls under an exclusion in order to deny a claim due to lack of coverage. This type of coverage generally applies to the dwelling and other structures section of your policy.

Potential Covered Losses on a Standard Homeowner’s Policy

Does homeowner’s insurance cover damage to your home? It depends. It generally does if it was caused by a covered peril; whether through the standard policy or via endorsements that have been added to the policy. A standard homeowner’s policy (broad form) may include the following list of covered perils:

  • Fire & Lightning
  • Windstorm & Hail
  • Explosion
  • Riot or Civil Commotion
  • Non-Owned Vehicles or Aircraft Damage
  • Smoke
  • Vandalism
  • Theft (Limited)
  • Glass Breakage
  • Weight of Ice, Sleet, and Snow
  • Collapse of Building (Not Settling Damage)
  • Freezing of Plumbing or Heating System
  • Accidental Leakage of Plumbing or Heating System

What Does Standard Homeowner’s Insurance Not Cover?

Insurance is all about risk management and balancing the coverage you need with what you are willing to self-insure by forgoing coverage. Emerging and evolving risks, economic shifts, and more have an effect on insurance trends and can have an effect on what is and is not covered under standard insurance policies.

Evolving needs and stricter underwriting restrictions can mean more or new coverage exclusions on standard policies. This only makes obtaining the right endorsements or additional lines of insurance even more important to ensure proper coverage; if lines of coverage are available for those perils.

There are endorsements and additional lines of coverage available through supplemental markets for a variety of the “standard” coverage exclusions that can allow you to get coverage for additional perils. In this way, you can turn coverage exclusions into covered losses provided you have the right endorsements on your policy. Depending on the nature of the risk and coverage needed, there may not be a market for it, there could be limited options available, or the options available could be cost-prohibitive.

What Are Coverage Exclusions?

Coverage exclusions are the perils and incidents of financial loss for which an insurance company will not reimburse you; unless you have obtained coverage for them via endorsements or additional lines of coverage. In most cases, coverage exclusions are explicitly stated on insurance policies. It’s important to understand the implications of these exclusions and get additional coverage for anything you need to avoid having related insurance claims denied.

Common Coverage Exclusions With Standard Homeowner’s Insurance

Coverage exclusions will vary by market, carrier, location, etc. It’s important to work with your insurance agent when obtaining and reviewing insurance proposals to make sure you know what is and isn’t covered by your current policy and any new policies you are considering.

This is not an exhaustive list because coverage exclusions can vary and there are endorsements available to add coverage for some of them. In general, a standard homeowner’s insurance policy usually does NOT cover the following perils:

  • Dogs & Pet Liabilities (It Depends)
  • Normal Wear and Tear
  • Intentional Loss & Neglect
  • Home-Based Businesses
  • Earthquakes & Earth Movement
  • Power Surges (Caused by Utility Companies)
  • Floods & Sewer Backups
  • Pest Infestations
  • Mold & Wet Rot
  • Local Building
  • Government Action
  • Acts of War
  • Nuclear Hazards

Important Considerations in the Event of a Loss

Here are a few points to remember in the event of a loss:

  • Your policy may cover the dwelling, other structures on the property, and your personal belongings.
  • It is your responsibility to ensure that your property is maintained in a way to avoid loss.
  • The loss is covered only if it is caused by one of the perils listed on your policy, including the standard policy as well as any endorsements or additional lines of coverage you have added to the policy.
  • After a loss, you are responsible for taking measures to avoid any further loss.
  • You are responsible for paying the deductible amount on your policy.

Final decisions about whether a loss will be covered, and for how much, is ultimately the decision of a trained claims adjuster. This is also why it’s important to regularly review your insurance coverage to make sure you are properly insured before a loss occurs. There are many times to review your homeowners’ insurance. Doing so annually before your renewal date is a minimum.

Please note that the above information is not, by any means, all-inclusive, but will hopefully help in determining if you did, in fact, experience a covered loss. It is also important to note that many of the standard policy exclusions can be addressed with policy endorsements.

These policy endorsements have a cost associated with them but can address any specific concerns or exposures you may have that are outside the scope of coverage within the standard policy. Additional coverages beyond what is excluded in the standard policy may also be available and increase your protection while helping you build a better homeowner’s insurance policy.

Call your agent right away when you’ve experienced a loss and we will do our best to walk you through the process. For help with your homeowner’s policy, contact Ruhl Insurance, a Division of Horst Insurance, at 717-665-2283 or 800-537-6880.

Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.