Home Insurance FAQ: Safeguard Your Shelter

Homeowners insurance is not legally required, but it is a wise investment. 

Insurance provides a set of protections you need as a homeowner. You can get help paying for home repairs caused by fires, storms, floods, theft, or vandalism. Your insurance policy will also replace damaged or destroyed personal property, including clothes, electronics, and furniture. You can also collect reimbursements for additional living expenses if you must move out of the home after a covered loss. 

Those benefits should encourage you to insure your home voluntarily. But if you're still reluctant, know that your mortgage lender will require you to carry homeowners insurance. 

Always consult with your insurance provider after or during a home remodel. Your provider may need to adjust the policy or raise your coverage to account for new features like a pool or second story. 

On the other hand, added security equipment, like motion sensor lights or surveillance cameras, can reduce your premiums. This is one reason to talk with your provider before the remodel is done. If you made your home bigger, your coverage levels should go up. But you may be able to offset some of the associated premium increase by upgrading key systems and adding safety equipment.

You should notify your insurance provider when someone moves in or out of your home. Doing so helps you avoid the worst-case scenario of an unexpected claim denial.

Scenarios that can affect your coverage

Renting out a room on a short-term or long-term basis.

Standard homeowners insurance usually doesn't cover room rentals. If you take on a tenant and don't tell your insurer, you may see claim denials or even a policy cancellation later.¹

Moving out of the home with no intention of coming back.

Vacant homes are more likely to experience claims because no one is around to look after the house. For this reason, some homeowner's policies may specify that the coverage is for "residence premises." If you move out and don't tell your provider, it could void your policy.²

Renting the entire home out to someone else.

If you're renting the entire home out, you should have landlord insurance rather than homeowners insurance. 

Family members moving in or out.

The residents in your home have personal property coverage and liability coverage under your homeowners' policy. It'll be far easier to use that coverage when the insurance provider already knows who's living in the home.³

Yes, your insurer can cancel your homeowners' insurance in the middle of the policy term -- but only under specific conditions. You might see a mid-term cancellation if you don't pay your premiums or you attempt to defraud the insurer, for example. 

More commonly, the insurer will choose not to renew your policy at the end of a term. This can happen if you file too many claims or fail to maintain the home. Insurers can also exit entire communities based on overall risk, regardless of what's happening at your house. 

Most states have laws defining the situations when insurers can cancel or non-renew your policy. Generally, the insurer must provide 45 days' notice of your policy's termination so you can find replacement coverage.⁴

Homeowners insurance will help with roof replacement, but only in specific situations. If an issue that's covered by your policy caused the damage, you can submit a claim for the repairs. Commonly, those issues are hail or wind damage.⁵

On the other hand, if your roof needs repair because it's old, then you're responsible for the cost of replacement. 

Your insurance may pay for tree removal. It depends on why the tree fell. If weather or another covered issue caused the tree to topple, then your insurer should pay to remove it. If the tree fell because it was dying or diseased, then the removal cost is on you. In the provider's eyes, you not removing a dead or dying tree is neglect -- and your policy never covers neglect.⁶

Filing a claim on your homeowner's policy can raise your insurance premiums. Generally, if the claim is small and not related to a major event, you won't see a big change (or any change at all). However, if the claim leads to a big payout or you file several claims quickly, then you likely will see a noticeable rate increase.⁷

Insurance companies normally don't cover foundation repairs. The exceptions are in cases where covered issues caused the problem.⁸

If the frozen pipe is the result of a sudden, accidental event like an ice storm or power outage, then you can submit a claim. However, if the damage was caused by a faulty heating system or lack of maintenance, then your provider likely won't pay for the repairs.⁹

No, your homeowners' policy does not cover tenants. Even a landlord's policy won't extend liability insurance or personal property coverage to your tenants.¹⁰

You can manage this by requiring your tenants to carry their own renters' insurance. That protects both of you from bad surprises going forward.

Generally, the liability and medical payments coverage on your policy pay for injuries and any property damage that result from your dog attacking someone. 

The exception is if your policy excludes your dog's breed. Make sure you know those breed exclusions. If one applies to you, shop around for a different provider.¹¹

Homeowner's insurance only covers damage caused by sudden and accidental events like fires, lightning strikes, or windstorms. Termites, squirrels, and other pests generally don't show up suddenly, or by accident. 

If you have an infestation, it's your responsibility to remove the pests and repair any resulting damage. Failing to do so looks like negligence to an insurance company.¹²