What is a covered peril in homeowners insurance?

In homeowners insurance, a “covered peril” is an event the insurance company agrees to reimburse you for should you file a claim. Covered perils include fire, lightning strikes, weight of snow or ice, theft, and vandalism. Some policies might also cover windstorms and hail, unless you live in an area prone to tornadoes or hurricanes. In that case, you might have to purchase separate windstorm insurance or pay a separate wind/hail or hurricane deductible when you file a claim. 

Your homeowners insurance also lists perils not covered by your policy. Also known as policy exclusions, homeowners insurance generally won’t pay for damage caused by flooding, earthquakes, normal wear and tear, poor maintenance, or intentional acts.

Examples of covered perils in homeowners insurance

The following 16 perils are covered by even the most basic homeowners insurance policy.

3 types of home insurance policies and covered perils

There are three common types of homeowners insurance policies: HO-2, HO-3, and HO-5.   

• HO-2 policy: Also known as a broad form policy, HO-2 insurance is the cheapest and most limited coverage option. It covers your home, additional structures, and belongings from the 16 named perils listed above. 

• HO-3 policy: Also known as a special form policy, HO-3 insurance is the most common type of home insurance. Your home and belongings are protected with the more comprehensive open perils coverage, while your belongings are protected with named perils coverage.

• HO-5 policy: Also known as a comprehensive form policy, HO-5 insurance is the most expensive and comprehensive type of homeowners insurance. It protects your home, additional structures, and belongings with open perils coverage.

Open perils and named perils coverage, explained

Depending on your policy type, the dwelling, other structures, and personal property portions of your homeowners insurance will have either named perils or open perils coverage. While named perils coverage is less expensive, open perils coverage increases the likelihood of a successful claim payout.

• Named perils: This means your property is covered against the 16 perils specifically listed in the insurance policy. When you file a claim with named perils coverage, the onus is on you to prove the damage or loss was caused by one of the 16 perils in your policy. 

• Open perils: Known interchangeably as “all risks'' coverage, open perils means you’re covered against all causes of loss except the specific peril exclusions listed in your policy. When you file a claim with open perils coverage, the burden of proof falls on the insurer to prove the damage or loss is not covered by your policy.

What perils are covered by homeowners insurance?

Here’s a breakdown of common named perils that are covered under a standard home insurance policy.

Fire and smoke

A standard policy covers your home, other structures on your property, and your personal belongings if they incur fire or smoke damage. If you need to live somewhere else while your home is being repaired or rebuilt, homeowners insurance will also cover your additional living expenses. This includes hotel stays, restaurant meals, and pet boarding costs.

Windstorms

A standard home insurance policy might cover damage caused by windstorms or hail. The one exception is if you live in an area prone to natural disasters like tornadoes and hurricanes. In this case, you might not be covered unless you purchase a windstorm endorsement or separate windstorm policy. You also might have to pay a separate wind/hail or hurricane deductible when you file a claim.

Lightning strikes

Your home and belongings are also covered against lightning strikes. If lightning strikes a tree on your property and it falls onto your home, homeowners insurance will likely cover its removal and house repairs. If a lightning strike hits a power line, causing a power surge and frying your electronic appliances, insurance will likely pay to replace your damaged possessions.

Theft 

Homeowners insurance can also pay to replace your belongings, whether they’re stolen from your home or hotel room. Certain expensive valuables, like jewelry, firearms, or art, are only insured up to a limited amount — typically $1,500. However, most insurers will let you increase coverage limits or add a scheduled personal property coverage endorsement for an additional fee. 

College students are typically covered under their parents' homeowners insurance policy if their belongings are damaged or stolen while living on campus. But they'll need their own renters insurance to cover their belongings and liability if they move off campus.

Sudden, internal water damage

Homeowners insurance generally covers water damage when it’s sudden and internal. This means if a burst pipe floods your basement or your well pump is damaged in a fire, you’ll likely be covered for repairs.

Falling objects

If a tree falls onto your home, home insurance will likely pay for its removal and house repairs.

Weight of snow or ice

If an ice dam or snow buildup causes your roof to cave in, your policy should cover the cost of roof replacement or repairs. 

What perils are not covered by homeowners insurance?

Your policy will also include a list of exclusions — these are perils that are not covered by homeowners insurance. 

Flooding

Most standard home insurance policies won’t cover water damage caused by outside flooding. Additionally, water damage caused by sewer backups or seepage are excluded from coverage. To cover your home and belongings from flooding, you’ll need separate flood insurance. 

Earthquakes

Damage caused by earth movement — meaning earthquakes, tremors, landslides, mudslides, subsidence, and sinkholes — are also not covered by most standard policies. Coverage may be available via an endorsement or separate earthquake insurance.

Normal wear and tear or lack of maintenance

Homeowners insurance generally won’t cover internal water damage caused by neglect or poor maintenance. So if your home has an obvious mold problem, or if an exposed pipe leaked over the course of months and caused extensive water damage, you likely wouldn’t be covered. 

Pests or vermin

Additionally, damage caused by pests — including rodents, termites, bed bugs, and birds — are also excluded from coverage. Home insurance also won’t pay for pest removal.

Ordinance or law

A standard policy also won’t cover losses associated with the government’s enforcement of local building codes. That means if the government requires you to demolish, repair, renovate, or remodel your home to meet local building ordinances, insurance won’t cover the costs. 

While most policies provide a limited amount of ordinance or law coverage, it only kicks in if your house is damaged by a covered peril. This coverage is generally 10% of your policy’s dwelling coverage.

Damage during a move

Homeowners insurance typically doesn't cover damage to your property that occurs during a move. If you're worried about your belongings getting damaged while relocating, you might want to take out a separate insurance policy from the moving company you're using.