What is home insurance coverage?
State Farm® helps provide protection for your home and other personal property in case of a covered loss. It helps cover the contents of a typical home, like furniture, appliances, clothing, family heirlooms and other movable personal belongings. It also includes coverage if someone gets hurts at your home, or you cause damage to someone else's property, and you were liable.
What does a homeowners insurance policy cover?1
Of course, the ability to repair or replace your home is foremost in homeowners coverage. But homeowners insurance may include even more, like the following lines of coverage:
Property coverages
Dwelling
Helps cover damage to your home and attached structures. This can include sheds, garages, greenhouses and even docks.
Personal property
Helps cover your personal possessions not permanently attached to your home or your property if they are stolen or damaged by a covered peril.1
Inflation coverage
Helps keep pace with the rise of construction costs in your area.
Loss of use
Helps cover additional living expenses if you need to vacate your home because of a covered loss.
Additional coverages
May provide payment for arson reward, collapse, credit or bank card forgery, debris removal, fire department service charge, locks and remote devices, power interruption, property removed, refrigerated products, temporary repairs, trees, shrubs and landscaping, and volcanic action.
Liability coverages
Personal liability
Helps cover lawsuits against you, providing protection against legal liability for bodily injury or property damage if a third party is accidentally injured or their property is damaged.
Medical payments to others
Helps cover injuries on your property. Also known as guest-medical payments, it helps provide limited coverage if a third party is accidentally injured and needs medical treatment.
Additional coverages
May provide payment for damage to the property of others caused by you.
Coverage in action
Let's say you're in your home watching a storm roll in. Next thing you know, the strong winds cause a tree to fall through the roof and into your bedroom. Dwelling coverage provided by your homeowners insurance policy would help pay to repair or replace the covered damage.
What does home insurance not cover?1
Check your policy for specifics, but most homeowners policies do not cover the following types of losses. You might want some additional coverage.
Causes of loss
Including but not limited to damage caused from flood, underground water, earthquakes, mudslides, settling, deterioration, contamination, nuclear hazard, birds, rodents, insects or domestic animals. If your community participates in the National Flood Insurance Program (NFIP), you can buy flood insurance coverage through agents enrolled in the NFIP-Direct program.
Work-related exposures
Business pursuits or professional services. Learn more about business owners policies.
Vehicle usage
Liability from your ownership, operation, or maintenance of aircraft, motor vehicles and some watercraft.
Why review your homeowners insurance coverage annually?
A house needs dusting. Your homeowners policy might need the same. Improvements, inflation, even the building costs in your neighborhood, might have some influence on your estimated replacement costs year-to-year.
Have you recently remodeled or improved your home?
When you upgrade or improve your home — like installing an impact resistant roof — you may increase your home's estimated replacement cost. Your State Farm agent can help adjust your policy to meet your home insurance coverage needs. As part of your policy's provisions, you have 90 days to notify us of any remodeling or additions to your home that increases its replacement cost by $5,000 or more.
Has the inflation rate risen since your last appraisal?
State Farm provides coverage that automatically adjusts each year in an effort to compensate for increases in construction costs in your area. However, certain conditions such as severe weather can increase the demand for labor and materials and raise costs beyond normal inflation. It is important to update your coverage amount each year to keep up with the changing economy.
What influences the building costs in your area?
Market conditions in your area may impact the amount it will cost to rebuild your home if you experience a loss. Replacement cost estimates are influenced by supply of labor, demand for labor and the cost of construction materials. Keeping up with the current market conditions in your area and changing your home insurance coverage amount accordingly will help you maintain coverage at least equal to 100% of the estimated replacement cost of your home.
Frequently asked questions about homeowners insurance coverage
Since your home may be the biggest investment you ever make, it’s important to understand your home insurance coverage options. From market value to replacement cost, you’ve got a lot to consider when determining the right coverage amount for your home. Some things to consider:
Getting a home replacement cost estimate
Before you purchase a new home, determine the appropriate amount of coverage needed.
- Ask if a replacement cost estimate1 is available when you have the home value appraised.
- Consult with your local builder association or a reputable builder for an estimate.
- Check with your State Farm agent to help you with this process.
What factors could affect your estimate?
- Upgraded bathrooms or kitchens (including cabinets)
- Finished or partially finished basement
- Additional rooms or living space
- Custom molding or arched windows
- Age of the home
- Other unique features
It depends on the source of the water. If a pipe bursts, your homeowners insurance may help pay for the damage caused by a covered loss. If a river or other bodies of water overflow, most homeowners insurance policies — including those offered by State Farm — would not cover damage caused by flooding. Talk with your State Farm agent about potential coverage options based on your needs.
Most homeowners insurance policies — including those offered by State Farm — do not cover damage caused by flooding if a river or other bodies of water overflow. If your community participates in the National Flood Insurance Program (NFIP), you can buy flood insurance coverage through agents enrolled in the NFIP-Direct program. Your State Farm agent can probably assist you with obtaining flood insurance.
Garages, whether attached or not, typically are covered by a homeowners insurance policy. This generally includes detached garages, sheds, greenhouses, barns, shops, and gazebos. It may also include driveways, fences, or an existing dock.
It’s impossible to predict what the exact cost will be to replace your home in the future. It’s important to have enough coverage to account for unforeseen circumstances. So, aim to purchase an amount of coverage at least equal to the estimated replacement cost.
What is market value?
The amount a buyer would pay for a home, including the land, regardless of how much it would cost to rebuild the home.
What is replacement cost?
Replacement cost is the cost necessary to repair or replace your entire home. It is not any of the following:
- Market value of the home
- The home's or land’s initial purchase price
- Outstanding amount of any mortgage loan
Typically, items which are misplaced are not covered by standard homeowners insurance. Talk to your agent about potential coverage options for specific personal items you may want to protect.
If damaged by a covered loss, most homeowners insurance will help cover repairs or replacement. However, most homeowner policies will not cover an air conditioner if damage is due to age, maintenance, wear, tear, or deterioration.
Most standard homeowners insurance policies do not cover rentals. Once you turn your residence into a rental property, it becomes a business asset and creates more risk.
Homeowners policies have maximum limits the company will pay for loss to specified types of property (these limits can vary among companies). What’s on a typical “special limits” list?
- Money, bank notes, coins
- Business property
- Watercraft including trailers, furnishings, and equipment
- Trailers (other than boat trailers)
- Firearms (applies to theft only)
- Silverware and goldware (applies to theft only)
- Rugs, tapestries (theft only)
If you need higher limits for certain types of property, your State Farm agent can help
Get a local agent who gets you
There’s a State Farm agent nearby ready to offer personalized service to fit your specific needs.
Additional insurance options
Simple Insights®
Looking for help protecting your residence? You’ve come to the right place. Articles from Simple Insights draw on over 100 years of State Farm knowledge.
Should you do a home insurance review annually?
First-time home buyer tips
What to know about a property inspection1 Please refer to your actual policy for a complete list of covered property and covered losses. Homeowners insurance provides coverage for damage to your house and other structures on the property where your house is located. It is important to understand, however, that not every possible cause of damage is covered. There are important limitations on coverage in homeowners insurance policies, depending on the cause of damage or the location of your home, and some types of damage aren’t covered at all. Coverage for damage from earthquakes, for example, may be available by adding it to a homeowners policy for additional premium, or by purchasing a separate policy. Coverage for damage from floods is not provided and is usually available only by purchasing a separate flood insurance policy, often through the National Flood Insurance Program.
All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.
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