The 6 Parts of Homeowners Insurance (HO-3)
Coverage A: Dwelling
Covers your home's structure—walls, roof, floors, built-in appliances, attached garage.
Typical amount: Replacement cost of your home
Coverage B: Other Structures
Covers detached structures: shed, fence, detached garage, pool house.
Typical amount: 10% of dwelling coverage
Coverage C: Personal Property
Covers your belongings: furniture, electronics, clothing, appliances.
Typical amount: 50-70% of dwelling coverage
Coverage D: Loss of Use
Pays for hotel, meals, and living expenses if your home is uninhabitable.
Typical amount: 20% of dwelling coverage
Coverage E: Personal Liability
Protects you if someone is injured on your property or you damage someone's property.
Typical amount: $100,000-$500,000
Coverage F: Medical Payments
Pays for guest injuries regardless of fault—a goodwill coverage.
Typical amount: $1,000-$5,000
What's NOT Covered (Common Exclusions)
🌊 Flood Damage
Never covered. Requires separate flood insurance through NFIP or private carrier.
🌍 Earthquake
Excluded. Separate policy needed, especially in CA, WA, and other seismic zones.
🔧 Maintenance Issues
Wear and tear, mold, pest damage, settling, and neglect are not covered.
🚰 Sewer Backup
Usually excluded but available as optional rider. Worth adding if you have a basement.
💎 High-Value Items
Jewelry, art, and collectibles have sub-limits ($1,500-$2,500). Schedule separately.
💼 Home Business
Business equipment and liability need separate business insurance.
Common Covered Events
Fire
Lightning
Windstorm
Hail
Theft
Vandalism
Vehicle Damage
Falling Objects
FAQs
Does home insurance cover water damage?
It depends. Sudden/accidental water damage (burst pipe, appliance leak) is covered. Flooding (external water entering home) is never covered. Gradual leaks due to lack of maintenance are not covered.
What's replacement cost vs. actual cash value?
Replacement cost pays to replace items at today's prices. Actual cash value subtracts depreciation. For a 5-year-old TV worth $1,000 new, ACV might only pay $300. Always choose replacement cost for dwelling and contents.
The Bottom Line
Standard homeowners insurance (HO-3) covers your home, belongings, and liability—but has important exclusions. Flood and earthquake are never covered and require separate policies. Consider adding sewer backup coverage and scheduling high-value items separately. Always choose replacement cost coverage over actual cash value.