What does homeowners insurance cover?

A typical homeowners policy does four jobs after a covered loss: rebuild the house, replace your belongings, cover you if someone is hurt on your property, and pay for somewhere to stay during repairs. Each job has its own limit.

  • Dwelling: the structure itself, including an attached garage and the back porch that has been next year's project since you bought the place.
  • Other structures: a detached garage off the alley, a fence, or a shed.
  • Personal property: furniture, clothes, electronics, and other belongings.
  • Liability: helps if a guest is hurt at your home or you accidentally damage someone else's property.
  • Loss of use: helps with hotel and meal costs while covered damage is repaired.

Most policies cover damage from causes such as fire, wind, hail, and theft. The dwelling limit is the number people get wrong most often. It should reflect what it would cost to rebuild the house today, not what it would sell for and not what you paid. What your policy pays depends on its terms, so check your declarations page.

What does homeowners insurance usually not cover?

Standard homeowners policies typically exclude earthquake damage and water that backs up through sewers or drains (Illinois Department of Insurance definitions). Flood is typically excluded too. Most policies also leave out wear and tear, pests, and damage you cause on purpose.

Sewer backup and sump pump overflow

Here's what usually happens. A heavy August storm rolls through, the sewers can't keep up, and water comes up through the floor drain. If the basement is finished, that's the carpet, the drywall, and whatever was on the floor. A standard policy typically won't pay for that damage.

The Illinois Department of Insurance describes "Sewer Back-up and Sump Pump Overflow Coverage" as an optional add-on. It covers damage, such as to a finished basement, from water that backs up through a sewer or drain or overflows from a sump pump (IDOI definitions). Ask us whether your policy has it and what limit applies. We ask everyone with a basement.

Flood insurance

Flood is not typically included in homeowners policies, so you have to buy it separately (Illinois Department of Insurance). The National Flood Insurance Program offers residential coverage up to $250,000 for the building and $100,000 for contents (FloodSmart.gov).

  • Coverage generally starts 30 days after you buy it. There are exceptions, such as buying it as part of a mortgage transaction.
  • Most belongings kept in a basement aren't covered.
  • Sewer backup is generally covered only when it results from a flood.

Because of the waiting period, don't wait for a storm forecast to ask about flood coverage. Whether a water loss is covered depends on the cause and your policy terms.

Where can I get help in Illinois or Arizona?

The Illinois Department of Insurance and the Arizona Department of Insurance and Financial Institutions answer consumer questions and take complaints; the City of Chicago handles basement flooding reports. The numbers and links:

How we work on home insurance

We ask about the basement first. Finished or not, floor drain or sump pump, battery backup or none. Then the roof, because its age matters to any wind or hail claim later. We explain replacement cost versus actual cash value before you choose, not after a claim. Replacement cost pays to rebuild or replace at today's prices; actual cash value subtracts depreciation. Our Phoenix clients get the same questions with a different weather report: monsoon roof damage instead of August basements.

If you own a two-flat and live in one unit, tell us, because renting out the other unit may change how the policy is written. We speak English and Spanish, and we would rather spend twenty minutes on the phone now than explain an exclusion later. When you have a claim, see our claims page. Want more liability protection? Ask about an umbrella policy.

What to have ready when you call

When you're ready, call us for a quote.

  • The property address and the year the home was built
  • Square footage, number of stories, and whether the basement is finished
  • The year the roof was replaced, if you know it, and roughly when the wiring, plumbing, and furnace were last updated
  • Your current declarations page, if you have a policy now. The page that lists your limits, not the billing statement.
  • Your mortgage company's name and your loan number
  • Any property claims in recent years
  • Safety features: smoke detectors, a monitored alarm, a battery backup on the sump pump

Common questions

Does homeowners insurance cover a flooded basement?

It depends on where the water came from. Standard policies typically exclude flood and sewer backup. An optional sewer backup and sump pump overflow add-on can cover water from drains or a sump pump, and flood coverage is a separate policy. If you're not sure which you have, call us.

How much dwelling coverage do I need?

Enough to rebuild your home at today's construction costs. That's different from your home's market value or what you paid for it. We can go over the estimate with you.

Is earthquake damage covered?

Standard home insurance policies typically don't cover earthquakes, according to the Illinois Department of Insurance. Separate coverage may be available for an added cost. Ask us about it.

What should I do after damage to my home?

If it's safe, stop the damage from getting worse: shut off the water, tarp the roof. Take photos, keep receipts for emergency repairs, and report the claim promptly. Our claims page walks you through it.