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Homeowners insurance by peril — what's covered, excluded, and surprise gaps in 2026
Most buyers think homeowners insurance is a single product. It is actually a layered patchwork of perils, each with its own coverage rules, deductibles, and exclusions. A standard HO-3 policy (the most common residential form) covers the dwelling against "open perils" — meaning anything not specifically excluded. The exclusions list is where the surprises live, and the typical homeowner does not read them until after a loss.
Published 2026-04-25 · Last reviewed 2026-05-16 · methodology
What HO-3 typically covers
Fire and smoke damage — including wildfire if your policy doesn't have a wildfire-specific exclusion (common in California, Colorado, Oregon, and parts of the Mountain West post-2023).
Theft and vandalism — covers stolen property + damage from break-in attempts.
Lightning, hail, wind — including wind damage from hurricanes BUT wind/hail can have a separate higher deductible (1-5% of dwelling coverage) in Florida, Texas, Carolinas.
Falling objects (trees onto house), weight of ice/snow, sudden discharge of water from plumbing.
What is always excluded (you need a separate policy)
Flood — even one inch of rising surface water. Requires a separate NFIP policy (federal) or private flood coverage. About 25% of NFIP claims come from properties OUTSIDE FEMA flood zones (zone X), so don't skip it just because you're not in a high-risk zone.
Earthquake + landslide + sinkhole. California, Oregon, Washington, Missouri (New Madrid fault zone), and Tennessee have the most active seismic risk. CEA (California Earthquake Authority) is the most common provider in CA.
Mold (if from gradual leak), termite, rot, mechanical breakdown — covered only if from a sudden covered peril (e.g., burst pipe).
War, nuclear, intentional acts.
Coverage limits that catch buyers off-guard
Roof — older policies (and some new ones) use ACV (actual cash value) for roofs older than 10-15 years, meaning depreciation is subtracted from any claim. 20-year-old roof at $30k replacement cost might pay out $9k. Confirm "replacement cost" not "ACV" before binding.
Personal property limits — jewelry, firearms, cash, electronics have sub-limits ($1,500-$2,500 typical). Add scheduled-property riders for valuables.
Loss-of-use (additional living expense) — pays for hotel/rental while home is uninhabitable post-claim. Typically 20% of dwelling coverage; verify the cap matches your area's rental cost.
Ordinance-or-law coverage — pays for code upgrades required during repair (e.g., wildfire-region rebuild must use Class A roof). Default coverage is often 10% of dwelling; raise to 25-50% in code-strict jurisdictions.
Pricing reality — 2025-2026 market shifts
Florida, California, Louisiana, Texas: many insurers stopped writing new policies 2023-2025. State-of-last-resort pools (Florida Citizens, California FAIR Plan, Louisiana Citizens) doubled or tripled in size. Always check insurability BEFORE making an offer.
Premium increases: nationwide average +21% from 2022 to 2024 (NAIC + S&P Global Market Intelligence). Wildfire-prone zip codes saw +30-80%. Confirm a 12-month premium quote before closing.
Wind-coverage carve-outs in hurricane states: Texas + Florida coastal counties may exclude wind entirely, requiring a separate TWIA or Florida Citizens wind policy.
What zipradar shows
We don't quote insurance, but we surface every peril dimension that affects your premium — FEMA flood zone (/topic/flood-zone/[zip]/), wildfire hazard (/topic/wildfire-risk/[zip]/), earthquake zone, crime rates (/topic/crime/[zip]/), and lead/water risks that some insurers ask about.
Always pull 2-3 insurance quotes during the inspection period; some homes are uninsurable at any price and you need to know before closing.
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