Know What You’re Covered For: A Guide To Understanding Home Insurance

Home insurance is one of the most important tools for protecting what’s likely your most valuable investment—your home. Yet, many homeowners don’t fully understand what their policy actually covers until they need to file a claim. By then, it may be too late.
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This guide will break down the key components of a typical homeowners insurance policy, clarify what’s covered (and what’s not), and help you feel confident in your coverage choices.

What Is Home Insurance?
Homeowners insurance is a policy that provides financial protection against losses and damage to your home and personal belongings. It also offers liability protection if someone is injured on your property.


What Does Home Insurance Typically Cover?
A standard home insurance policy (commonly referred to as an HO-3 policy) generally includes the following types of coverage:

1. Dwelling Coverage

• Protects the structure of your home, including walls, roof, and foundation.
• Covers damage caused by fire, windstorms, hail, lightning, vandalism, and other named perils.

2. Other Structures

• Covers detached structures on your property like garages, sheds, fences, or guesthouses.

3. Personal Property

• Covers your belongings (e.g., furniture, electronics, clothing) if they’re stolen or damaged.
• Applies to items even when they’re outside your home, like in your car or at a hotel.

4. Liability Protection

• Pays legal fees and damages if you’re found liable for injury or property damage to others.
• Also includes coverage for incidents caused by pets.

5. Medical Payments to Others

• Covers minor medical expenses if a guest is injured on your property, regardless of fault.

6. Loss of Use (Additional Living Expenses)

• Pays for temporary housing, meals, and other extra expenses if your home becomes uninhabitable due to a covered event.

What Home Insurance Typically Doesn’t Cover
While home insurance offers broad protection, it doesn’t cover everything. Common exclusions include:

• Flood damage – Requires a separate flood insurance policy through the National Flood Insurance Program (NFIP) or a private provider.
  
  
• Earthquake damage – Usually excluded; separate coverage is available.
  
  
• Wear and tear – Routine maintenance and gradual damage are not covered.
  
  
• Infestation – Damage caused by pests like termites or rodents is typically excluded.
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• Business equipment – Limited or no coverage for business-related items unless added with a rider.

Optional Coverages and Endorsements
You can enhance your policy with riders or endorsements to meet specific needs, such as:

• Scheduled personal property – For high-value items like jewelry, art, or collectibles.
  
  
• Sewer or water backup – Covers damage caused by backed-up drains or sump pump failures.
  
  
• Home business coverage – For entrepreneurs who work from home.
  
  
• Identity theft restoration – Helps cover the cost of restoring your identity if you’re a victim of fraud.

Tips for Reviewing and Understanding Your Policy

1. Read your declarations page – This summary page outlines your coverage limits, deductibles, and endorsements.
   
   
2. Understand your deductibles – Know how much you’ll pay out of pocket before coverage kicks in.
   
   
3. Know your coverage limits – Make sure your limits reflect the current value of your home and belongings.
   
   
4. Ask questions – Speak with your insurance agent if anything is unclear.
   
   
5. Review annually – Life changes fast—so should your coverage.

Final Thoughts
Understanding your home insurance policy is key to making sure you're properly protected when disaster strikes. Don’t wait until a claim is denied to find out what’s covered. Review your policy regularly, ask questions, and make updates as needed to ensure you’re truly covered for life’s unexpected moments.

At Cordell & Company Insurance Agency , we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays, and we're here to help you out. Learn more about our products and services by calling our agency at (817) 924-4236​. You can also request a free quote by CLICKING HERE. 

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.