Caleb Meriwether, Haven Insurance Partners, visits with Dan Reaves, host of ‘The Dan Reaves Show,’ today, and each Wednesday at 3:30 p.m., to discuss all things insurance.
For many homeowners, insurance is something you set and forget—until something goes wrong. But not all homeowners insurance policies are created equal, and understanding the fine print can make a significant difference when you need to file a claim. In this post, we’ll cover the essentials of what’s typically included in a standard homeowners policy, as well as key add-ons and coverage nuances you should be aware of: roof coverage and payout terms, underground service lines, flood and earthquake insurance.
What’s Typically Covered
Most standard homeowners insurance policies include the following core protections:
Dwelling Coverage – Covers the structure of your home (walls, roof, etc.) from perils like fire, hail, windstorms, lightning, and vandalism.
Other Structures – Protects detached buildings on your property like garages, fences, or sheds.
Personal Property – Covers your belongings inside the home—furniture, electronics, clothing, etc.
Liability Protection – Covers injury or property damage you or your family members cause to others.
Loss of Use (Additional Living Expenses) – Pays for lodging, meals, and other expenses if your home becomes uninhabitable due to a covered loss.
Roof Coverage and Payout Terms: What to Know
Your roof is one of the most important parts of your home—and one of the most expensive to replace. Yet not all policies treat roof damage the same.
Replacement Cost vs. Actual Cash Value (ACV):
Replacement cost coverage pays to replace your roof with new materials of similar kind and quality. Actual cash value coverage deducts for age and wear, potentially leaving you with a smaller payout.
Cosmetic Damage Exclusions:
Some policies will not cover minor aesthetic issues (like small hail dents) if the roof still functions properly.
Material and Age Restrictions:
Older roofs or ones made of high-risk materials (e.g., wood shake, slate) may come with limited or modified coverage. Some carriers shift to ACV once a roof reaches a certain age.
Tip: Review your policy or ask your agent to confirm how your roof is covered—and whether it’s worth upgrading to full replacement cost coverage.
Underground Service Line Coverage: An Often-Missed Gap
Standard policies usually do not cover damage to underground utility lines running between your house and the street. That includes:
Water and sewer pipes
Electrical and internet lines
Gas and geothermal piping
Adding underground service line coverage as an endorsement can cover excavation, repair, and even landscape restoration. Costs to repair underground lines can quickly reach $5,000–$10,000 or more, making this an affordable and valuable add-on.
Flood and Earthquake: Separate Policies You May Need
Many homeowners are surprised to learn that flood and earthquake damage are not covered under standard homeowners policies.
Flood Insurance: NFIP vs. Private Options
Flood insurance must be purchased separately, and there are two main options:
NFIP (National Flood Insurance Program):
Backed by FEMA, the NFIP offers policies with up to $250,000 in building coverage and $100,000 for personal belongings. It’s widely available, especially in high-risk flood zones, but has limitations:
No coverage for additional living expenses if you’re displaced
Strict coverage caps that may not fully protect higher-value homes
Longer waiting periods (usually 30 days before coverage kicks in)
Private Flood Insurance:
An increasingly popular alternative, private flood policies are written by commercial insurers and often offer:
Higher coverage limits, often exceeding $500,000 or more
Loss of use coverage, helping with hotel or rental costs
Broader definitions of flood events and shorter waiting periods
Potentially lower premiums for properties outside high-risk zones
Key Consideration:
If you have a mortgage and are in a high-risk flood zone, lenders will usually require NFIP or equivalent coverage. However, even homes outside FEMA flood zones can benefit from flood protection—over 20% of all flood claims occur in low-to-moderate risk areas.
Earthquake Insurance: A Critical Add-On in Many Regions
Standard homeowners insurance won’t cover damage from an earthquake. Earthquake insurance, either as a separate policy or endorsement, helps cover:
Structural damage to your home
Personal property losses
Additional living expenses while repairs are made
Deductibles are typically higher—often 10–20% of the dwelling limit—but the coverage is essential in seismically active areas.
Final Thoughts
Homeowners insurance provides vital financial protection, but it’s not a blanket solution for every risk. Understanding your roof coverage terms, plugging gaps like service line failures, and adding protection for flood or earthquake damage can make the difference between a minor inconvenience and a financial disaster.
Work with your insurance advisor to review your current policy and make sure it aligns with the risks your property truly faces.
