What is homeowners insurance?

Homeowners insurance is an agreement between you and your insurance company that can cover your house, unattached structures, lawsuits against you, and more. When you buy homeowners insurance, you're buying “coverages,” which are essentially things your insurer agrees to pay for.

It's basically like paying a little now to avoid potentially paying a lot later.

How does homeowners insurance work?

When you purchase insurance, your insurer or agent will ask simple questions about you and your home, and then you'll have some options when picking coverages. Several of these factors can impact your price. Generally, more coverage means a higher price. Then if your house is damaged or something else happens, you can file a “claim” with your insurance company. That's an insurance term for asking for payment based on what's protected on your policy. If it's covered, they'll pay for the damages or losses up to your specified coverage limits.

Generally, more coverage means a higher price.

Do I need homeowners insurance?

Homeowners insurance is not legally required. But, if you have (or are getting) a mortgage, your lender will likely require you to purchase insurance to protect their investment. In fact, Progressive and many other insurers will help coordinate details with your lender.

How to buy homeowners insurance

Insurers offer various ways to purchase homeowners insurance. Here's how you can buy insurance through Progressive:


We'll ask simple questions, then you choose your coverages and start date.

Call us

You'll speak with a licensed homeowners representative who will guide you through everything.

Through an agent

If you want local advice, we'll connect you with a licensed independent agent near you.

What's covered

Standard coverages

These are the coverages offered in most states, but coverages can vary by state. Keep in mind, insurance doesn't cover maintenance or general wear and tear.

Your house

Dwelling coverage: Anything permanently attached to your house, including attached garages, chimneys, roofs, countertops, cabinets, flooring, vanities, and even in-ground pools, etc.

Unattached structures

Other structures: Structures not attached to your house, including sheds, unattached garages, gazebos, pergolas, fences, driveways, etc.

Your belongings

Personal property: Your stuff, even if it's damaged or stolen away from your home. For example, personal property covers tools stored in your shed destroyed by a fire or even your computer if it's stolen from your car. Belongings that are commonly covered:

  • Clothing
  • Furniture
  • Decorations
  • Tools/power equipment
  • Electronics (TVs, DVD players, sound systems, etc.)
  • Toys/other games (arcade systems, billiards tables, ping-pong tables, etc.)

Limits for belongings: Insurers typically have a per-item limit that is a percentage of your total personal property coverage. This means that certain expensive items may not be fully insured. For example, you have $100,000 in personal property coverage, but the limit for any single item is 10% of the total coverage. If your $15,000 grand piano is damaged, you'll only get a payment for $10,000, minus your deductible. Long story short: If you have expensive items, contact your insurer to get proper coverage. You'll then add them as individual items to your policy, called scheduling an item or adding a rider.

For many customers, these items commonly include:

Temporary living expenses

Loss of use: If your home is damaged from a covered loss and uninhabitable, this coverage pays for hotel/rent expenses plus food (above what you'd normally pay). For example: If you usually spend $100 on groceries a week, but need to spend $500 to eat out, you'll get $400.


Personal liability: If someone is injured on your property, due to your fault, or you/your family members on your policy cause damage to others' property, this coverage will kick in. If you're sued over these damages, this will also pay for your lawyer and court fees as described in your policy. For example, if your babysitter falls down your stairs because there is not adequate lighting, this would pay for her injuries. Or, if you're playing catch in the backyard and the ball accidentally breaks your neighbor's window, this coverage will pay to replace the window.

Injuries on your property

Medical payments: Pays medical bills if someone else is hurt at your home or on your property.

When you're covered

Perils: These are really just events/instances that can cause damage. Which perils are covered can vary depending on your insurer and the type of policy you choose. Here are some commonly covered perils:

  • Windstorms
  • Fire and smoke
  • Lightning
  • Hail
  • Tornadoes
  • Explosions (e.g., aerosol can or gas grill)
  • Theft and vandalism
  • Car/aircraft crashing into your home
  • Falling trees or other objects
  • Weight of snow, sleet, or ice
  • Water damage (from leaking roofs, broken pipes, water heaters, washing machines, dishwashers, or other appliances, but not floods)

If you need coverage from floods, you can purchase a separate flood insurance policy.

Your out-of-pocket costs

Deductible: Your deductible is simply the amount you have to pay if your home is damaged or you have another claim. For example: You have a $500 deductible and a tree falls on your house, causing $3,000 in damage. You'll pay $500, and your insurer will pay the remaining $2,500.

The higher your deductible, the more of the repair or claim cost you'll have to take on. That means your out-of-pocket costs will be higher, but you'll have a lower overall rate and vice versa.

Explore more on how home insurance deductibles work.

Extra coverages

These are the extra coverages you can add.

Backed-up sump pumps or plumbing systems

Water back-up: This is an optional coverage. Sometimes plumbing/sewer systems or sump pumps can get backed up, which can cause significant damage and an expensive mess. This coverage pays for damage to your home, belongings, and water removal.

Not all insurers offer this coverage.

Other lawsuits and situations

Personal injury: This covers other lawsuits and situations that your liability coverage (which is automatically included) does not cover. The lawsuits and situations covered by personal injury aren’t very common but can be expensive:

  • Libel or slander lawsuits (something you write/say that damages a person's reputation or business, subject to restrictions)
  • False arrest, detention, or imprisonment
  • Lawsuits against you, such as wrongful entry or malicious prosecution
  • Wrongful eviction

How homeowners insurance is priced

Insurers consider a variety of factors, but they're really trying to answer two key questions: How likely are you to have a claim and how much will it cost. Here are a few specifics:

Large, expensive homes: More expensive homes cost more to repair.

Low-damage area: If hail, tornadoes, crime, etc. aren't common where you live, you're less likely to have a claim.

Brick/stone homes: These are less combustible than siding and other materials.

Smoke alarms and other safety features: These prevent fires and burglaries.

No claims in the past: This shows that you're a responsible homeowner and lowers your price.

Want a bit more on pricing? See more on the average homeowners insurance price and what impacts your homeowners price.