Home Insurance Policies: Read The Fine Print

Finding the right home insurance policy isn’t something anyone is really excited to do. And the fear of not having the right coverage is real.

We’re here to help you simplify a frustratingly confusing process as much as we can.

But don’t forget to “read the fine print” at the end of this story, because there are a few sneaky ways you can think you’re covered when, in practice, things can look different when disaster strikes.

What Is Most Likely Covered

There are a few extreme weather events that are commonly included in home insurance packages.

• Wildfires: Most policies cover fire damage, including smoke, for your home and belongings.
• Tornadoes and Wind: Standard policies generally cover damage from wind and water (unless it’s from flooding, more on that below). If a tornado rips off your roof, you’re usually set.
• Hail: Structural damage is typically covered. But “cosmetic damage” — like a battering to landscaping or denting in your gutters — you'll likely have to pay for that yourself.
• Winter Storms: Insurance typically covers damage from the weight of ice/snow, like a roof collapsing, and frozen pipes — as long as you’ve kept the heat on.
• Lightning: If you have a direct strike to your property or if there is a resulting fire, it’s usually included in standard coverage.

What Probably Needs Separate Coverage

A few things are almost never covered by a standard policy, in which case you’ll need an additional line of coverage.

• Flooding: This is one of the biggest insurance gaps. Standard insurance covers "water from above" like rain through a broken window. But rarely "water from below," which comes from the ground in cases of overflowing rivers, heavy rain pooling or storm surges. You need a separate policy through the National Flood Insurance Program or a private flood insurer.
• Earthquakes: Standard policies exclude "earth movement,” which includes quakes as well as mudslides, landslides and sinkholes.
• Hurricanes: This one falls in a bit of a gray area. Your standard policy typically covers the wind from a hurricane, but it does not cover the flood or storm surge.
• Sewer Backups: If a massive rainstorm causes the city sewer to back up into your basement, a standard policy won't pay for the cleanup unless you added a “water backup endorsement.”

(MORE: Storm Prep Checklist For Your Home)

If you face total devastation and your home is uninhabitable, you’ll want a “loss of use” policy in your coverage to pay for your hotel and meals while you rebuild.

The Devil Is In The Details (Deductible)

Now, even though we’ve told you these things are most likely covered, after the tragedy of one of these events, you may still find yourself with a sudden five-figure repair bill.

You might have hail coverage — but at a $12,000 deductible, will you even really get to use it?

It’s common for your deductible to be higher for certain types of coverage in areas where it is needed most. If you’re in a state like Alabama, where it feels like there’s a tornado every week in spring, you’re probably going to end up paying more out of pocket for this type of damage.

In coastal states, you often have a "hurricane deductible," which is a percentage of your home's value (for example, 2% to 5%) rather than a flat dollar amount.

(MORE: What To Know About Insurance Ahead Of Hurricanes)

One of the most important things to understand is Actual Cash Value (ACV) compared to Replacement Cost Value (RCV) — the latter is better.

ACV says, "Yeah, you bought this sofa for $1,000 a few years ago, but now it’s really only worth $300,” so that’s what you’re going to get. If you want a new $1,000 couch, that other $700 is still up to you to pay out of pocket.

RCV is simple; you get the amount it takes to buy the same item new at today’s market prices, regardless of how old or used your current one is. Sometimes, that can even mean you get more money. If inflation has risen, the cost of a new couch is $1,200; that’s the check you’ll receive.

The catch is, you’re definitely going to be paying a higher month-to-month premium with RCV plans.

Where You Live Matters

When it comes to selecting coverage, you might not need it all. But be realistic, if you live near a fault line, grab that earthquake policy.

In high-risk states like California, some insurers are now excluding wildfires, so double-check your "declarations page."

If you're in a state up north where snowstorms are commonplace but typically covered, still triple-check that area of coverage in your plan (that goes for any regular weather occurrence wherever you are).

What If I’m A Renter?

The long story short here is that the focus shifts from the building to your belongings.

(MORE: Weather-Safety Home Hacks to Withstand the Worst)

If the roof blows off, your landlord’s insurance pays for a new roof — but you’re still responsible for your soaked bed and broken TV. Renter’s insurance with the correct policies in place can save you.

And where you live matters here too: if you’re on a ground-floor unit vs. being on a higher floor, your risk level for things like flooding and wind damage changes, so keep that in mind while shopping.

The Bottom Line

When in doubt, talk to an insurance expert to make certain what you need is truly covered. They’ll understand all of the intricacies of your specific living situation that can be a headache to sift through on your own. And wherever you are, double-check that you've got flooding coverage.

weather.com content writer Ada Wood enjoys exploring the stories that science and climate teach us about our natural world and how it influences the way we live in it.