Residential Property Insurance

What is residential property insurance?

People buy residential property insurance to insure a house or the place they live, and their personal things. There are different types of insurance. The kind you buy depends on what you want to protect and whether you rent or own. The most common types are:

Homeowners Insurance

This usually covers:

  • Your house.
  • Other structures and buildings not connected to your house, like a garage or fence.
  • Most of your personal items, like clothes, TVs, and furniture. These items are also called “contents” or “personal property.”
  • Temporary living expenses. This pays for some or all of your costs to live somewhere else while your home is being fixed. These are also called “additional living expenses” (ALE).
  • Medical bills for someone hurt at your house.
  • Liability claims for accidents caused by you, your property, family, or pets. This coverage may pay for someone else’s injuries and the damage to their property.

This does not cover:

  • Medical bills for you or any family members living in the house.

Dwelling Insurance

This usually covers:

  • Your house.
  • Other structures and buildings not connected to your house, like a garage or fence.

This does not cover:

  • Personal items, like clothes, TVs, and furniture.
  • Additional living expenses (ALE).
  • Medical bills for someone hurt at your house.
  • Liability claims for accidents caused by you, your property, family, or pets. Dwelling insurance does not pay for someone else’s injuries and the damage to their property.

Condominium Insurance

This usually covers:

  • The inside of the condo, like appliances, counter tops, flooring, and fixtures.
  • Other structures you own on your property, like a shed.
  • Personal items, like clothes, TVs, and furniture.
  • Additional living expenses (ALE).
  • Medical bills for someone hurt at your condo.
  • Liability claims for accidents caused by you, your property, family, or pets. This coverage may pay for someone else’s injuries and the damage to their property.

This does not cover:

  • The outside of the condo or the building the condo is in. However, it may cover property you are responsible for under your association agreement.
  • Medical bills for you or any family members living in the condo.

Tenant/Renters Insurance

This usually covers:

  • Personal items inside an apartment or other rented building or structure.
  • Additional living expenses (ALE).
  • Medical bills for someone hurt at your home.
  • Liability claims for accidents caused by you, your property, family, or pets. This coverage may pay for someone else’s injuries and the damage to their property.

This does not cover:

  • The inside or outside of the building or structure itself. It is usually up to the owner to pay to fix this damage.
  • Medical bills for you or any family members living in the home.

Other Important Things to Know

Flood damage is not covered!

Flood damage is not covered under most residential property policies. Most flood policies are offered by the federal government through the National Flood Insurance Program (NFIP)Learn more about flood insurance on our flood page.

Wind and hail may not be covered!

Make sure your policy covers wind and hail. And if you live on the Texas coast, you may have to get coverage through the Texas Windstorm Insurance Association (TWIA). Learn more on our TWIA info page.

How much money you get depends on the policy you get.

Policies pay different amounts to fix or replace property, home, or personal things. Usually, you have to pay part of the cost yourself. That amount is called the deductible. After that, how much money you get from the insurance company depends on whether you have “replacement cost” (RCV) or “actual cash value” (ACV). Learn more on our ACV vs RCV page.

You may need more insurance!

You may need to add extra coverage to your insurance policy. You will likely have to pay more for this extra insurance. How much you have to pay for more protection depends on the insurance company and the kind of insurance you choose. Some examples are:

  • Backup of sewers or drains – This helps you pay for damage caused by sewer or drain backup into your house. It does not include sewer or drain backup from flash floods.
  • Foundation or slab damage – This helps you pay for damage by water or steam from a plumbing, heating, or A/C system.
  • Specific personal items – This helps you pay for high cost items like jewelry, fine arts, and guns.
  • Extra liability– This helps you pay for accidents involving your pet, pool, trampoline, or drone.
  • Cyber insurance – This helps you pay for identity theft, to restore your data and get your computer working, or even for counseling and relocation due to cyberbullying.

More Terms to Know

Actual cash value (ACV)  the amount to replace or fix your home and personal items minus depreciation. Depreciation is a decrease in value for age, or wear and tear.

Amount of insurance (AOI) –the estimated construction cost to replace your home, not the land.

Claim – a request made to an insurance company to pay for damage or injury.

Claims adjuster – reviews the loss to figure out what is covered under the policy, if liability exists, and how much is owed.

Coverage – the damage or injuries an insurance company agrees to pay for under the policy.

Deductible – the amount you owe in a loss before the company pays its part.

First-party claim – a claim filed by you against your own insurance policy.

Increased cost of construction coverage – (also called law or ordinance coverage) coverage that pays the extra cost to rebuild your home to meet updated building codes or ordinances.

Liability – when you are responsible for other people’s injuries or damage to their property.

Policy – a contract between you and the insurance company. The policy tells you what’s covered and what the insurance company is required to pay.

Policy period  the period of time your policy provides coverage.

Premium – the amount you pay an insurance company for your policy.

Replacement cost value (RCV)  the amount to replace or fix your home and personal items.

Surplus lines insurance  insurance meant to cover special risks that most insurers aren’t able or willing to insure.

Third-party claim – a claim you file against another person’s insurance policy or a claim someone files against your policy.