Homeowners insurance

What a homeowners policy covers, how dwelling and personal property limits are set, common exclusions, and which companies write it.

Companies: 16
Full profiles: 14
Comparisons: 10

The basics

How homeowners insurance works

A homeowners policy is really four promises in one contract: repair the building, replace what is inside it, pay for somewhere to live while the work is done, and defend you if someone is hurt on your property. Each of those has its own limit, and only the first one is set by you directly. The rest are usually written as a percentage of the building limit, which is why getting the building limit right matters more than anything else on the page.

Nothing on a homeowners policy pays out because your house lost value or because the roof got old. It pays when a specific event the policy names damages something it covers.

This line in the database

Companies writing this line: 1614 researched in full
Published comparisons: 10
Tools for this line: 3
Guides that apply: 7

What you are buying

What the coverages do

Each of these is priced and limited separately, so it helps to read them as separate promises rather than as one policy.

Dwelling: The house itself and anything attached to it. The limit should reflect what it would cost to rebuild at current local labor and material prices, which is a different number from the market value and a different number from what you paid.
Other structures: Detached things on the property: a garage, a shed, a fence, a driveway gate. Written as a share of the dwelling limit unless you raise it.
Personal property: Your belongings, wherever they are, including in your car or on a trip. Certain categories such as jewelry, cash, firearms and collectibles are capped far below the overall limit unless you schedule them individually.
Loss of use: Pays the extra cost of living somewhere else while the home is uninhabitable after a covered loss. It pays the difference between your normal costs and your temporary ones, not your whole hotel bill on top of a mortgage you were paying anyway.
Personal liability: Pays when you are legally responsible for someone else’s injury or property damage, at home or away, and pays for the legal defense.
Medical payments to others: Pays small medical bills for a guest hurt on your property without anyone having to establish fault. It is deliberately a small limit, meant to settle minor incidents before they become liability claims.

Add-ons

Optional coverages you may be offered

Extended or guaranteed replacement cost, which pays above the dwelling limit when rebuilding costs more than expected. This matters after a widespread disaster, when local construction prices spike.
Scheduled personal property, an itemized list of valuables with their own limits and often no deductible, usually requiring an appraisal.
Water backup, for water coming up through drains and sewers or from a failed sump pump, which the base policy normally excludes.
Service line coverage, for the buried pipes and wires between the street and your house that you own and are responsible for.
Equipment breakdown, for mechanical or electrical failure of systems and appliances, which is otherwise excluded as maintenance.
Ordinance or law, which pays the extra cost of rebuilding to a current building code rather than to the way the house was originally built.
Umbrella liability, a separate policy that sits above the liability limits on your home and auto policies.
Home business, because a standard policy limits or excludes business property and business liability at home.

Where cover stops

Common exclusions and limitations

The exclusions are where a policy is actually decided. These are the ones that come up most often on this line.

Flood is excluded. Rising water from outside the home is a separate policy, whether through the National Flood Insurance Program or a private insurer. Read that exclusion before assuming storm water is covered.
Earthquake and earth movement are excluded and are also bought separately, with their own deductible structure.
Gradual damage is excluded: a slow leak, rot, rust, mold from ongoing seepage. A pipe that bursts is usually covered, a pipe that has been dripping for a year is not.
Wear and tear, maintenance and anything failing because of age are excluded, including a roof that has simply reached the end of its life.
Insects, rodents and other infestations are excluded.
Homes left vacant beyond a stated period lose coverage for some perils.
In hail and hurricane areas the policy may pay roofs on an actual cash value basis, or apply a separate percentage-based wind or hurricane deductible instead of a flat one. Both change the payout substantially and are easy to miss.
Some dog breeds, trampolines and pools without fencing can void or restrict liability coverage.

Pricing inputs

What affects what you pay

01The cost to rebuild, which drives the dwelling limit and therefore most of the premium.
02Where the home is: wildfire, wind, hail, flood and crime exposure by location.
03Construction type, roof age and roof material.
04The age and condition of plumbing, wiring, heating and the roof.
05Distance to a fire hydrant and to a staffed fire station.
06Your claims history on this property and on previous ones.
07The deductible you choose, including any separate wind or hail deductible.
08Liability limit, scheduled items and each optional coverage you add.
09Protective features such as monitored alarms, water shutoff devices and storm shutters.

The process

How getting a quote generally works

In the order it usually happens. Nothing here is a quote, and this site does not sell one.

1
You describe the property: square footage, year built, construction, roof age, systems, and any updates.
2
The insurer runs that through a replacement cost estimator to produce a dwelling limit, then checks loss history reports for prior claims on the address and on you.
3
Many insurers also order an inspection or aerial imagery after binding, which can change the terms.
4
Compare quotes only when the dwelling limit, the loss settlement basis, the deductibles including any wind or hail deductible, and the liability limit are all the same. A lower price attached to a lower rebuild limit is not a better deal.

Glossary

Terminology

The words that appear on a quote or a policy for this line, in plain language.

Replacement cost: What it costs to replace the item with a new equivalent today, with no deduction for age.
Actual cash value: Replacement cost minus depreciation. On an aging roof this is a far smaller payment, and which basis applies is one of the first things to check on a quote.
Named perils: A policy that covers only the causes of loss it lists. If it is not on the list, it is not covered.
Open perils: A policy that covers any cause of loss except those it excludes. A single policy can use one basis for the building and the other for the contents, which is why the two can be treated differently after the same event.
Coinsurance: A clause that reduces your payout if the dwelling limit is set well below the actual rebuild cost, even on a partial loss.
Endorsement or rider: A document that changes the base policy, adding, removing or limiting a coverage.
Loss settlement: The section that says how a payment is calculated. It is where replacement cost, actual cash value and roof schedules actually live.

Before you buy

Questions worth asking before you buy

Ask these of an agent, or of yourself, before comparing two prices.

How was the dwelling limit calculated, and what does it assume about rebuild costs?
Is the roof paid at replacement cost or actual cash value, and does that change with age?
Is there a separate wind, hail or hurricane deductible, and how is it calculated?
Is personal property replacement cost or actual cash value?
What are the internal caps on jewelry, electronics, tools and collectibles?
Is water backup included, and is there any coverage for flood at all?
Does the policy include ordinance or law coverage, and how much?
What would invalidate coverage: vacancy, a rental arrangement, a home business, a dog?

Who writes it

Companies that write this insurance

Every profile is built from the company's own documentation and from regulators, with the source and the date beside each fact.

All companies

Partial records

We have verified that these companies write this line, but have not finished researching them. Their profiles show only what is sourced.

Side by side

Comparisons for this line

A pair is published only where enough fields are verified for both companies to make the comparison worth reading. No comparison names a winner.

All comparisons

Free tools

Tools for this line

Each one shows its arithmetic and its assumptions. None of them produces a premium, a quote or a savings figure.

Tool

Deductible exposure explorer

Shows exactly how one loss splits between you and your insurer at each deductible level, and how much more of a loss you carry when you raise it.

Open tool

Tool

Insurance company comparison

Put two companies side by side on the facts we have verified, with the source for each one and an explicit gap where we have not verified something.

Open tool

Tool

Homeowners coverage estimator

Shows how the limits on a homeowners policy relate to each other: other structures, personal property and loss of use as percentages of the dwelling limit you enter.

Open tool

Guides

Guides that apply here

All guides

Guide

How to read an insurance policy without reading all of it

A policy is four kinds of document stapled together. Knowing which part answers which question lets you check the things that decide a claim without reading the whole contract.

Read the guide

Guide

What a deductible actually costs you

A deductible is not a one-time cost. How it resets, how many can apply at once and whether it is a flat amount or a share of a limit all change what you are exposed to.

Read the guide

Guide

Actual cash value versus replacement cost

The same limit pays very differently depending on which valuation method the policy uses, and the method is often chosen for you by default.

Read the guide

Guide

What insurance companies mean by an exclusion

Exclusions are not fine print bolted on to a policy. They are how coverage is defined, and there are only a few reasons any of them exist.

Read the guide

Guide

How to compare two insurance companies fairly

Most comparisons are unfair by accident, because the two things being held up against each other were never the same thing. Here is how to make them comparable first.

Read the guide

Guide

What to do when a claim is denied

A denial is a decision with a stated reason, and the reason determines what you can do about it. Work out which kind you received before you argue with anyone.

Read the guide

Guide

Why the same coverage costs different amounts for different people

Identical coverage carries different prices because insurers are not pricing the coverage. They are pricing the expected cost of the risk behind it, and that is assembled from categories of factor.

Read the guide

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