When it comes to exactly what your homeowners insurance will cover, things can get tricky. It’s generally thought to relieve you from paying for all or most of the damage that occurs to your home from natural causes, but not all natural disasters are covered by the most basic home insurance policies. Renters insurance can be a little more confusing, as it is not the same thing as home insurance, even if the place you’re renting is a single-family home. Renters insurance is bought by anyone renting a property and this coverage differs a lot from homeowners insurance. Here’s a general guide to what each type of insurance typically does and does not cover.
In general, homeowners insurance covers damage to your home. But this doesn’t mean any and every type of damage. It’s usually limited to damages caused by:
- Fires and smoke
- Theft and vandalism
- Weather (hail, lightning, wind)
Homeowners insurance can also cover damages to any appliances indoors or features of your home outdoors, caused by any of the above. Examples would be:
- Kitchen appliances
- Swing sets
This type of insurance usually covers home rebuilding costs (or at least some of it) and housing accommodations while your home is being repaired.
Renters insurance is very different from homeowners insurance, as it does not cover structural damage to the apartment, duplex, home, or whatever kind of dwelling the tenant is renting. These damages are to be covered by the landlord. Renters insurance is also much cheaper than homeowners insurance, and here is what it covers:
- Personal Property Damage (if your personal property is damaged by fire, wind, or theft).
- Personal Liability (if you are blamed for an injury or property damage).
- Medical Payments (medical costs if someone is injured on your property).
- Additional Living Expenses (if your living space is uninhabitable due to a fire, wind, etc.).
Homeowners insurance doesn’t usually cover things that can be prevented, such as termites. It also does not cover stolen items that are considered valuable, such as artwork, jewellery, or other collectables. Two major things thought to be covered by homeowners insurance, but are not, are floods and earthquakes. Even though these are unpreventable natural disasters, most homeowners insurance plans offer these as a separate coverage, depending on where you live.
Renters insurance is more similar to homeowners insurance when it comes to what it doesn’t cover. It does not cover termites, valuables, floods, and earthquakes like homeowners insurance, and it also doesn’t cover sinkholes. Though personal property is covered in renters insurance, damage to your car is not. Damages to your car are usually covered by a comprehensive car insurance plan and neither by renters insurance nor homeowners insurance.
Depending on where you live and who you receive your insurance from, your policy may cover certain things that other policies and areas don’t.
These things can be covered by your homeowners insurance if caused by fires, smoke, the weather, etc. and not by neglect:
- Foundation repair
- Mould damage
- Plumbing problems
- Roof leaks/replacements
- Tree removal
- Water damage
- Dog bites
- Air conditioning units
Keep in mind that with these and other types of coverage that there may be certain limits as to how much is actually covered.
Sometimes rental insurance will cover additional things like:
- Building alterations
- Credit card fraud
- Debris removal
- Food spoilage (caused by a power outage)
Just like you would shop around for the best coverage for your car, you should do the same with your home, whether you own it or if you’re renting it.
If you live in a place that sees a lot of hurricanes or earthquakes, you should look into getting flood insurance or earthquake insurance, respectively. Also, remember to keep up with the maintenance of your home to prevent problems that won’t be covered by insurance.