What Standard Home Insurance Covers in the U.S. (HO-3 Guide)

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Wondering what a “standard” homeowners policy covers?
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This guide explains the common HO-3 policy—what it typically includes, the named perils, what’s not covered, and popular add-ons—so you can tailor coverage to your home and budget

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TL;DR (Quick Take)

• The most common U.S. homeowners policy is HO-3. It usually covers your home (A), other structures (B), personal property (C), loss of use (D), personal liability (E), and medical payments to others (F)—subject to your limits and deductible. III
• Dwelling is typically “open perils” (all risks unless excluded). Personal property is typically “named perils.” III
• Flood and earthquake are not included in standard policies; they require separate policies/endorsements. FEMA
• Coverage varies by insurer and state. Always check your Declarations Page and policy form.

What “Standard” Usually Means: The HO-3 Policy
While wording varies by insurer and state, the HO-3 “Special Form” is a common baseline for owner-occupied homes.
At a high level, it includes:

• Coverage A – Dwelling: Your house and attached structures (e.g., attached garage). Open-perils basis unless excluded. III
• Coverage B – Other Structures: Detached structures like a fence, shed, or detached garage—often a set percentage of Coverage A. III
• Coverage C – Personal Property: Your belongings (furniture, clothing, electronics), typically against named perils. III
• Coverage D – Loss of Use (Additional Living Expense): Helps pay extra costs to live elsewhere when a covered loss makes the home uninhabitable. NAIC
• Coverage E – Personal Liability: If you’re legally responsible for injuries or property damage to others (on or off premises). III
• Coverage F – Medical Payments to Others: No-fault medical coverage for guests injured at your home. III

Note: Typical default percentages and sub-limits (e.g., B at ~10% of A) differ by insurer and state filings. Always confirm your limits. III

What Perils Are Covered?
Dwelling/Other Structures (A & B): “Open perils” means your home is covered for all direct physical loss unless excluded in the policy (e.g., flood, earth movement, wear and tear). III

Personal Property (C): Usually named perils. Lists vary by carrier, but commonly include: fire or lightning; windstorm or hail; explosion; riot/civil commotion; aircraft; vehicles; smoke; vandalism; theft; volcanic eruption; falling objects; weight of ice/snow/sleet; accidental discharge/overflow of water or steam; sudden/accidental tearing/cracking of certain systems; freezing; and sudden/accidental damage from electrical current. III

What’s Not Covered by Standard Home Policies?Common exclusions include (not exhaustive):

• Flood (rising water) — Requires separate flood insurance (NFIP or private market). FEMA
• Earthquake/earth movement — Typically excluded unless you buy an endorsement or separate policy. NAIC
• Routine wear and tear, maintenance, neglect — Insurance covers sudden and accidental loss, not upkeep. III
• Sewer or drain backup/sump overflow — Often excluded or very limited; many insurers offer an optional endorsement. NAIC
• Mold/fungi — Frequently limited; some carriers offer limited fungi/mold endorsements. NAIC

Because exclusions and endorsements vary widely, review your policy exclusions and ask your agent about add-ons that fit your risks.

Key Limits, Valuation & Sub-Limits to Know

• Replacement Cost (RC) vs. Actual Cash Value (ACV): Dwelling is often insured on a replacement-cost basis (rebuild at today’s prices). Personal property may be ACV by default (depreciated), with an option to upgrade to RC via endorsement in many states. Check your form. III
• Special sub-limits on certain items: Jewelry, watches, firearms, collectibles, cash, and certain electronics often have dollar caps for theft or specific causes. Scheduling items or buying a personal articles floater can raise limits. (Confirm your policy’s sub-limits and available floaters/endorsements.) III
• Wind/Hail in coastal areas: Some policies exclude or carry separate, higher deductibles; you may need a standalone wind policy or endorsement. NAIC

Popular Endorsements/Riders to Consider
Depending on your home and risk profile, many owners add:

• Water backup & sump overflow
• Equipment breakdown (home systems/major appliances)
• Extended or guaranteed replacement cost
• Personal property replacement cost
• Scheduled personal property (jewelry, art, instruments, collectibles)
• Ordinance or law (upgrades to meet current codes after a covered loss)
• Earthquake (state-specific availability)
• Flood (NFIP or private flood)

Availability, pricing, and terms differ by insurer and state. NAIC

Real-World Gaps to Watch

• Water vs. Flood: Sudden accidental discharge from your plumbing (e.g., burst pipe) is typically a covered named peril for personal property, while rising water from outside (flood) is not—that’s a separate flood policy. III
• Concurrent causation (wind vs. water): After major storms, disputes can arise over whether wind or flood caused damage; standard home policies exclude flood. Consider a flood policy if you’re exposed—even outside high-risk zones. FEMA

How to Right-Size Your Policy

1. Set Coverage A (Dwelling) to full rebuild cost, not market price. Ask for a replacement-cost estimate and consider extended/guaranteed RC where available. III
2. Inventory your belongings and choose Coverage C and valuation (RC vs. ACV) appropriately; consider scheduling high-value items. III
3. Pick liability limits with your total assets and risk in mind; many households add a personal umbrella policy for extra protection. III
4. Evaluate endorsements for water backup, ordinance/law, equipment breakdown, and regional perils (wind/hail deductibles, earthquake, flood). NAIC
5. Review your exclusions and deductibles annually and after renovations or big purchases. III

FAQsIs HO-3 “all risk” for everything?
No. HO-3 is open-perils for the structure (A/B) but named perils for personal property (C), and it still contains exclusions (e.g., flood, earth movement, wear/tear). III

Does homeowners insurance cover floods?
No. You’ll need a separate flood policy (NFIP or private). Even homes outside high-risk zones can flood. FEMA

What about earthquakes?
Standard home policies typically exclude earthquake. Coverage may be available via an endorsement or a separate policy, often with a percentage deductible. NAIC

Can I get coverage for sewer or drain backup?
Usually yes--as an optional endorsement with its own limit. NAIC

Credible Resources for Deeper Reading

• Insurance Information Institute (Triple-I): Standard homeowners coverage overview + exclusions. III
• NAIC Consumer Guides: Endorsements, coastal wind/hail, earthquake basics and deductibles. NAIC
• FEMA / FloodSmart: Flood risk and why you need a separate flood policy. FEMA
• HO-3 “Special Form” sample wording: Illustrative policy language on open vs. named perils. III

Important Disclaimer
Home insurance is regulated at the state level and policy forms vary by insurer. The details above are general information—not legal or coverage advice. Always review your Declarations Page and policy forms, and talk with a licensed agent to confirm what your specific policy covers, excludes, and limits.