What do homeowners insurance policies really cover?

In case a disaster strikes your home, you should know what to expect from your insurance company. You should comprehend what your homeowners policy covers because it helps you figure out if you need to purchase special coverage for the exclusions. Pick your coverage carefully since you don't want to spend money for coverage you do not need.

Homeowners policies vary by policy type. There are HO-1, HO-2 and HO-3 policies. HO-1 policy provides coverage mainly for fire, lightening, windstorm, hail, explosions, riot, civil commotion, damage from vehicles, and theft.

An HO-2 policy provides coverage mainly on falling objects: weight of ice, snow, sleet, accidental discharge or overflow of water from the plumbing, sudden and accidental tearing, cracking, burning or bulging of a steam or hot-water heating system, freezing of plumbing, and artificially generated electrical current.

An HO-3 policy provides coverage on everything except the exclusions outlined in the policy. As the statistics show, 84.2% of homeowners have an HO-3 policy. An HO-3 policy is standard and therefore contains a number of exclusions such as freezing of pipes in an unoccupied, vacant or under-construction building, freezing, thawing, pressure, or weight of water or ice to a fence, pavement, theft from a building that's under construction, vandalism and malicious mischief, flooding, earthquake, structures used for a business, intentional damage, war, nuclear accident, and losses resulting from the failure to protect property after a loss. 

In case you have a pet or an animal that caused a fire, you get covered for the damage caused by the fire. Since insurance companies do not consider pest problems to be "sudden and accidental,' they claim that a pest problem is a part of routine maintenance around the house.

If you still want to upgrade your home in case it gets damaged, it is likely that some policies will pay out if you need to upgrade to meet local building codes. So whatever policy you have, you should check it to see if the coverage applies to you.

There are damages, such as floodwater, that are not covered by any policy. In this case, you should get flood insurance. It is an optional coverage and it is highly recommended, especially if you live in areas vulnerable to flood. Any damaged caused by lighting, such as fire or damage to electronics from a surge, is covered.

Soot from burning candles is not covered by your homeowners insurance policy. You are not covered if you are running a small business from your home and a fire destroys your computer equipment. If you want to get insurance because you run your business at home, you will need to purchase a separate policy because your standard homeowners insurance policy won't cover any losses associated with this case.

Less common occurrences includes a religious phenomenon that damages your home as well as planes, trains or automobiles that can hit your house. Both are covered by your homeowners insurance. Keep in mind that an anti-government militia invading your house is a less common occurrence and may or may not be covered.