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Medical payments insurance, also known as MedPay, can help cover medical bills related to injuries from an auto accident — no matter who was at fault.

This coverage, which you can add to your car insurance policy for extra protection, isn’t legally required in most states. But you may want to take a look at what MedPay has to offer before deciding whether to purchase it or not.

Read on for a look at what MedPay covers and how it could help reduce the financial impact if you or one of your passengers requires medical treatment after a car accident.

How Does Med Pay Work?

MedPay is an optional auto insurance add-on that’s designed to help pay for reasonable medical expenses for you and your passengers after a car accident. It may also extend to you or a household member if you’re hit by a car while walking, jogging, or riding a bike — or if you’re injured while you’re a passenger in someone else’s car.

Because MedPay coverage typically kicks in without waiting for an insurer to determine who was at fault, payments are often processed more promptly. And there’s no copay or deductible that you have to pay before MedPay coverage starts.

There are, however, limits on how much MedPay coverage you can purchase. (Usually from $1,000 to $10,000.) So although MedPay can be a useful way to quickly pay off smaller medical bills and other qualifying costs, it isn’t meant as a substitute for other types of insurance, such as health insurance or your auto policy’s bodily liability coverage.

To maximize the benefits of your MedPay coverage, it’s important to contact your insurer as quickly as possible after your accident. And after you file your claim, it’s a good idea to keep track of all communications, costs, and payments.

Recommended: How Does Car Insurance Work?

What Does MedPay Cover?

A wide range of accident-related expenses may be eligible for MedPay, within your chosen coverage limit, including:

•   Doctor visits (including health insurance deductibles and copays)

•   Emergency room visits and hospital stays

•   Prescription medications

•   Lab tests and X-rays

•   Surgical procedures

•   Physical therapy or chiropractic treatment

•   Nursing services

•   Dental treatment

•   Funeral expenses

MedPay doesn’t cover lost wages, treatments that aren’t the result of a car accident, or services you may need because of your injury, such as child care or yardwork. When it comes to those costs, you may have to rely on other types of car insurance coverage.

Recommended: What Does Renters Insurance Cover?

MedPay vs Personal Injury Protection (PIP)

If you’re thinking that MedPay sounds similar to Personal Injury Protection (PIP), you’re right. Both can help cover your medical expenses (or your passengers’ bills) after a car accident, no matter who’s at fault. But there are also some key differences.

•   PIP is required in more states. Though some states offer both types of coverage, MedPay is currently required in only two states: New Hampshire and Maine. In comparison, 12 states require drivers to have PIP coverage: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah. These states are all no-fault states, which means drivers involved in a car accident file claims with their own insurance companies, no matter who caused the accident. You must exhaust your PIP coverage before you can file a claim with the at-fault driver’s liability auto insurance.

•   PIP may cover more than MedPay. Along with medical bills and funeral costs, PIP may also cover lost wages or pay for child care. (Coverages vary by state, however, so be sure to review your policy.)

•   PIP has higher coverage limits. PIP coverage limits can go as high as $100,000 or more, while MedPay coverage is generally limited to less than $10,000.

Recommended: Auto Insurance Terms Explained

How Much MedPay Coverage Do You Need?

There are a few factors that you may want to consider when determining how much MedPay coverage you need. These can include:

•   What type of health insurance coverage do you have? If you have reliable health insurance with a low deductible and low copays, you might decide that a lower MedPay limit is all you need.

•   How are you doing financially? Can you afford to pay out of pocket for some of your medical expenses if you’re in an accident? If not, MedPay may help you cover the gaps in your coverage.

•   What does your state require? If you live in a state that mandates MedPay, there may be a required minimum amount.

•   How much will the premiums cost? Depending on the limit you choose, MedPay coverage can be relatively inexpensive compared to other types of insurance.

Recommended: What Does Auto Liability Insurance Typically Cover?

Is MedPay Worth It?

If MedPay isn’t required in your state, you might be wondering if it’s worth adding the extra expense to your auto insurance policy — or how much insurance coverage you really need.

While you’re making that decision, keep in mind that the costs associated with medical care after an accident can sometimes be quite steep. And even if you’re confident you could cover your own expenses — with good health insurance, for example, or out of your own savings — you can’t know if every passenger in your car will have the same resources to pay for their care. If you can manage a small bump in the cost of your auto policy, you might find having that extra layer of coverage is worth it.

It may be helpful to review your overall insurance plan to get a clear idea of what you have and if there are any coverage gaps and then do some comparison shopping to see what it might cost to add MedPay to your plan.

The Takeaway

Adding medical payments coverage (MedPay) to your auto insurance policy could help you pay some or all of the medical bills resulting from an accident — no matter who’s at fault.

In most states, MedPay is optional (unlike PIP coverage, which is legally required in all 12 no-fault insurance states). But even if you don’t have to have it, you may want to consider adding this affordable protection to safeguard yourself, your passengers, and your finances.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

FAQ

Is medical payments (MedPay) coverage required by law?

MedPay coverage is only required in Maine and New Hampshire, but it is available as optional coverage in most other states.

Does MedPay cover passengers in my car?

Yes, MedPay covers passengers who are in your car when you’re in an accident.

Can you use MedPay if you have health insurance?

Yes. MedPay isn’t meant to be a substitute for health insurance, but it can help cover costs your insurance doesn’t — including deductibles and copays.

In which states is MedPay not available?

MedPay coverage is available in every U.S. state except Minnesota, New York, North Dakota, and Oregon.

How do you file a MedPay claim?

To maximize the benefits of your MedPay coverage, it’s important to contact your insurer as quickly as possible after your accident. You may be able to file your claim online at the insurer’s website, or you can call your agent and get information about next steps.

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Photo credit: iStock/Anastasiia Havrysh

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
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SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q326-037

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A car insurance deductible is the money you have to pay out of pocket before your insurance kicks in. It can affect your premium and your financial responsibility in the case of an accident. Not all insurance coverage requires a deductible. Understanding which ones do and how deductibles work is key to making smart choices about the coverage you need.

What Is a Deductible and How Does It Work in a Claim?

It’s costly for insurers to process lots of small claims. For this reason, they charge a deductible in hopes of dissuading policyholders from making these claims. As a result, for certain types of car insurance coverage, you will need to take on the responsibility of paying a deductible.

The size of your deductible will affect the size of your premium. A clear understanding of what that means can help you with personal insurance planning, including how premiums fit into your financial plan.

Recommended: Average Cost of Car Insurance in Texas

Definition: Your Out-of-Pocket Share Before Insurance Pays

Your car insurance deductible is the amount of money your carrier requires you to pay before they’ll step in and pay the rest.

For example, say your collision coverage has a $500 deductible, and you’re in an accident where you are at fault. Your vehicle has $1,500 in damage. In this case, you will be responsible for covering the first $500. Your insurance carrier will then cover the remaining $1,000 to repair your vehicle.

Deductible vs Premium Relationship Explained

In general, the higher your deductible, the lower your car insurance rate will be and the higher your out-of-pocket expenses will be. Choosing a higher deductible may help you lower your car insurance costs each month.

On the other hand, the lower your deductible, the higher your monthly insurance rate and the lower your out-of-pocket expense.

How Deductibles Affect Claim Payouts

Your deductible has a direct effect on your claims payout by determining how much you are expected to cover versus your insurance provider.

Which Coverages Have Deductibles?

Several coverage options typically have a car insurance deductible, including collision, comprehensive, uninsured motorist, and personal injury protection.

Collision coverage helps cover the cost of replacing or repairing your vehicle if you are in an accident in which you are at fault. This accident could be one in which you hit another car or a stationary object, such as a tree or a retaining wall.

Collision coverage is sometimes optional. If you finance your vehicle or you lease, your agreements may require that you have it. However, if you own your car outright, you may consider forgoing collision coverage, especially if your car is not very valuable.

Comprehensive insurance helps protect your car from events that aren’t an accident, such as fire, theft, vandalism, or acts of weather, such as hail. These are all incidents that are essentially beyond your control. Comprehensive coverage is also not always mandatory, but lenders and leasing companies may require that you carry it.

Uninsured driver coverage helps cover the cost of repair or replacement in the event you are in an accident where you are not at fault and the other driver does not have enough insurance to cover these costs. Meanwhile, personal injury protection helps cover the cost of medical expenses and lost wages when you’re in an accident, regardless of who is at fault.

Choosing Your Deductible: Balancing Cost and Risk

Choosing the right size deductible means striking a balance between your ability to cover the deductible, your risk tolerance, and the value of your car.

Here’s a closer look at the factors you’ll need to consider when choosing your deductible amount.

Cash Flow

Choosing a higher deductible is a good way to lower your monthly premiums, but you need to make sure that you have the cash on hand to pay the deductible should you need to.

You may have enough money coming in each month that cash flow isn’t a problem. But, if it might be, consider establishing an emergency fund to help you cover unexpected expenses like this. Conventional wisdom suggests building up an emergency fund equal to three to six months’ worth of expenses.

Risk Tolerance

The reason higher deductibles lower your premiums is that you are shouldering more of the risk in case of an accident. As a result, insurers are typically more willing to give you a discounted rate. However, you have to be comfortable taking on that risk. If you’re not, a lower deductible may be right for you.

How Likely You Are to File a Claim

Generally speaking, the more likely you are to file a claim, the more you may benefit from a lower deductible. If you are unlikely to file a claim, you may have greater savings with a higher deductible. So, consider your accident history or whether you engage in high-risk driving behaviors — such as speeding — when making your choice.

Value of and Condition of Your Vehicle

Consider the value of your car when choosing a deductible. The more your car is worth, the more it might make sense to have a higher deductible.

Recommended: Average Cost of Car Insurance in New York

Paying Your Deductible: When and How

You’ll typically pay your insurance deductible once your claim is approved. The method of payment can vary. In some cases, your provider will pay repair shops directly. In this case, you’ll need to make a payment for your deductible to the repair shop as well, and your insurer will cut them a check for the rest.

If you’ve already paid for the repair, you may make a claim for reimbursement, in which case your insurer will send you a check for the amount of the repair minus your deductible.

Recommended: Who Gets the Insurance Check When a Car Is Totaled?

When Deductibles Don’t Apply

In general, you won’t have to pay a deductible if you are not at fault. In this case, the other driver’s liability insurance should kick in and pay for the cost of repair or replacement.

There are certain other situations in which you may not owe a deductible as well. For example, if you have glass coverage, you may not owe a deductible if you need to replace a windshield. You may check with your insurance representative to find out which deductible applies and when, or take a look at your car insurance declaration page.

Recommended: Does Car Insurance Cover Hail Damage?

The Takeaway

In the end, choosing the right auto insurance deductible comes down to understanding your personal budget, driving habits, and risk tolerance. Whether you choose to prioritize lower monthly payments or stability should you need to make a claim, the key is making an informed decision that fits your unique situation.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

FAQ

Do I pay my deductible directly to the repair shop?

Yes, in some cases you’ll pay your deductible directly to the shop that repairs your car. Your insurance company will cut them a check for the rest.

Should I choose a $500 or $1,000 deductible?

The size of the deductible you choose will depend on a variety of factors, such as your ability to cover a higher deductible and whether you’re looking to lower your monthly premiums. You’ll also want to consider your comfort in taking on additional risk, the value of your car, and your driving record.

Does liability insurance have a deductible?

Liability insurance covers the damage you cause to another person’s vehicle in an accident in which you are at fault. Liability coverage does not have a deductible.

What happens if damage costs less than my deductible?

If the damage to your car costs less than your deductible, you are on the hook for covering the full cost of repair. Typically, your insurance won’t cover anything.

Can I change my car insurance deductible anytime?

You can usually change your deductible amount at any time, not just when you renew. The policy change will typically take effect at the start of the next policy period. Contact your insurer directly to make a change.

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photo credit: iStock/David Gyung

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SOPRO-Q326-017

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When you’re buying a home, you probably have a million questions that need answering, especially when it comes to getting the proper insurance to protect your investment.

Soon-to-be homeowners may see both title and homeowners insurance on the lending documentation and wonder what the difference is between the two. While both types of insurance can provide vital coverage for homeowners, they differ vastly in their purpose and protection.

What Is Homeowners Insurance?

A homeowners insurance policy protects a home and personal property from loss or damage. It may also provide insurance in the event someone is injured while they are on the property.

Here are some common things homeowners insurance may cover:

• Damage that may occur in the home, garage, or other buildings on the property

• Damaged, lost, or stolen personal property, such as furniture

• Temporary housing expenses if the homeowner must live elsewhere during home repairs

Depending on the policy, homeowners insurance may also cover:

• Physical injury or property damage to others caused by the homeowner’s negligence

• An accident that happens at home, or away from home, for which the homeowner is responsible

• Injuries that take place in or around the home and involve any person who is not a family member of the homeowner

• Damage or loss of personal property in storage

Some coverage may also apply to lost or stolen money, jewelry, gold, or stamp and coin collections.

Recommended: Roof Leak Coverage

Recommended: Changing Homeowners Insurance

Buying Homeowners Insurance

While someone can legally own a home without taking out homeowners insurance, the mortgage loan holder may require the homeowner to purchase an insurance policy. Typically, lenders do require this as a condition of the home loan.

It’s important to understand that homeowners need to insure the home but not the land underneath it. Some natural disasters, such as tornadoes and lightning, are covered by typical homeowners policies. Floods and earthquakes, however, are not. If you live in an area where floods or earthquakes are common, you may want to consider purchasing extra insurance to cover damages from potential disasters.

Special coverage may also be worthwhile for those who own valuable art, jewelry, computers, or antiques. There are two policy options that can help homeowners replace insured property in the event of damage or a loss. Replacement cost coverage covers the cost to rebuild the home and replace any of its contents, while actual cash value simply pays the current value of the property at the time of the loss.

When it comes time to shop for and buy homeowners insurance, start by asking trusted friends, family, or financial advisors for their recommendations. Do some online research, too. Before you make a final decision, contact multiple companies and request quotes in writing to compare their offerings. That process can give you a good idea of who is offering the best coverage for the most affordable price.

Recommended: Is Homeowners Insurance Required to Buy a Home?

What Is Title Insurance?

Title insurance provides protection against losses and hidden costs that may occur if the title to a property has defects such as encumbrances, liens, or any defects unknown when the title policy was first issued.

The insurer is responsible for reimbursing either the homeowner or the lender for any losses the policy covers, as well as any related legal expenses.

Title insurance can protect both the homeowner and lender if the title of the property is challenged. If there is an alleged title defect, which the homeowner may be unaware of at the time of purchase, title insurance can provide protection to cover any losses resulting from a covered claim.

The policy will cover legal fees incurred if there is a claim against the property.

Recommended: How to Read a Preliminary Title Report

Buying Title Insurance

Both homebuyers and lenders can purchase title insurance. If the homebuyer is the purchaser, they may want to insure the full value of the property. (The value of the property will affect how much the policy costs.) When the lender is the purchaser, they typically only cover the amount of the homeowner’s loan. When it comes time for a homebuyer to purchase title insurance, they have full choice of the insurer.

According to the Real Estate Settlement Procedures Act (RESPA) of 1974, the seller cannot require the homebuyer to purchase title insurance from one certain company.

Lenders are required to provide a list of local companies that provide closing services, of which title insurance is just one. But it may be worth doing independent research. Lenders may not select their recommendations based on the homebuyer’s best interest, but instead because a service provider is an affiliate of the lender and provides a financial incentive in exchange for a recommendation.

Again, it’s a smart idea to seek the counsel of friends and family and do online research to uncover competitive prices and learn which service providers have a solid reputation.

Recommended: What Are the Different Types of Mortgage Lenders?

The Takeaway

Homeowners insurance is an ongoing cost (billed monthly, quarterly, or annually) that helps cover damage or loss of the home and possessions within the home. Title insurance, on the other hand, can help protect against losses caused by defects in the title and is a one-time fee payable during the closing process. The advantage to having both types of coverage is that each policy can protect homeowners against financial loss in very different circumstances.

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

Find affordable homeowners insurance options with SoFi Protect.

FAQ

What is the difference between homeowners insurance and title insurance?

Homeowners insurance helps protect your home, belongings, and finances from covered damage, losses, and liability claims. Title insurance protects against certain financial losses caused by covered problems with the property’s title or ownership history.

Is homeowners insurance required when buying a home?

You can generally own a home without homeowners insurance, but mortgage lenders typically require it as a condition of the loan. Homeowners insurance can also help protect your investment from covered losses and damage.

Do I need both homeowners insurance and title insurance?

If you’re buying a home with a mortgage, your lender will typically require homeowners insurance and a lender’s title insurance policy. You may also choose to purchase owner’s title insurance to protect your own financial interest in the property.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SOPRO-Q326-014

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When you get homeowners insurance, you hope that you never need to use it. Still, it’s important to understand what your policy covers before something unexpected, such as water damage, occurs.

In general, homeowners insurance covers sudden and accidental water damage from internal causes, such as a faulty water heater or a burst pipe. It won’t cover all causes of water damage, though. If the water damage is due to flooding or lack of maintenance, your insurance likely won’t kick in.

When Homeowners Insurance Covers Water Damage

As previously mentioned, homeowners insurance will cover water damage in certain situations. For example, your policy may likely cover roof leaks caused by a storm but not ones caused by wear and tear on roof shingles. Similarly, if a pipe bursts in your home, the damage will be covered, but fixing the pipe itself will not.

It may be worth looking into whether your homeowners insurance covers plumbing issues. If, say, your water heater, dishwasher, or washing machine suddenly fails, your homeowners insurance probably won’t pay to replace the appliance, but it will likely cover the cost of the water damage.

When Homeowners Insurance Does Not Cover Water Damage

Homeowners insurance will not cover water damage from leaks that could have been prevented through proper maintenance. So, for example, does homeowners insurance cover water damage from a month-old leaking roof? Most likely not.

Flood damage is also not covered, but you can purchase additional flood insurance coverage.

Most homeowners insurance policies will also not cover damage from sewer backup or sump pump failure unless you have additional water backup coverage within your homeowners insurance policy. If you aren’t happy with your current insurer or policy, you can always look into changing homeowners insurance.

Recommended: What Does Homeowners Insurance Cover?

Preventing Water Damage in Your Home

You can help prevent water damage in your home if you keep up with routine maintenance and upkeep of your home. Clean your gutters and downspouts regularly so that debris and leaves do not clog them and cause water overflow issues. Frequently check major appliances, such as furnaces, sinks, dishwashers, washing machines, hoses, and pipes, for leaks or other issues. If there is an issue, repair it promptly. Also, inspect your roof often for damaged, cracked, or worn shingles that could let in rain.

Keeping your thermostat high enough to prevent frozen pipes can also help prevent pipes from bursting and damaging your home or property. During the winter, shut off the water supply to outdoor faucets and drain the lines.

It is important to know where your home’s main water shutoff valve is and how to use it so that if there is an emergency water leak, you can act quickly.

How to File a Water Damage Claim

In the event your home or property takes on water damage, you’ll need to act quickly. First, identify the source of the water damage, and stop the leak if you can. You should also try to dehumidify the room or area of the house to prevent mold.

Next, document the damage with photos and videos, as this can help the insurance claim process run more smoothly. If you have any images of the same location from before the damage, that might also be helpful, although it is not a requirement. You should also take an inventory of any ruined personal belongings.

Recommended: Does Homeowners Insurance Cover Mold?

Clear communication with your insurance company throughout this process is key. Ask them for the preferred way to file a claim — in other words, online, by phone, or via the company’s mobile app — and report yours as soon as possible. An adjuster may schedule a visit with you after you file to investigate the damage.

Don’t plan to do any major work until your insurance company has reviewed the damage, though some temporary fixes are OK. For example, you might want to throw out a wet carpet to prevent mold from growing or shut off water to a broken pipe. Keep receipts from any purchases you make related to the water damage, as you may get reimbursed by your insurance company.

Recommended: How Much Is Homeowners Insurance?

The Takeaway

Water damage in your home can be highly inconvenient and expensive. The cause of the water damage may determine whether your homeowners insurance will cover the damage or not. If the water damage was due to sudden and accidental leaks, you will likely receive reimbursement. But if the damage was due to flooding, sewer backup, sump pump failure, or general wear and tear, you likely won’t receive reimbursement.

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

Find affordable homeowners insurance options with SoFi Protect.

FAQ

Is water damage from a leaky roof covered by insurance?

In general, homeowners insurance will cover water damage from a leaky roof if the leak was sudden and accidental and caused by a covered reason. If the water damage is due to flooding or lack of maintenance, for example, insurance likely won’t pay for the damage.

How expensive is water damage repair?

Water damage repair costs will vary depending on what needs repairing, how extensive the damage is, and where you are located. According to the home services website Angi.com, water damage restoration costs $3,868 on average, but ranges from $1,383-$6,396.

Does my policy pay for leak detection or water removal services?

Homeowners insurance generally won’t cover leak detection or water removal services. An exception may apply if the leak is caused by a sudden, accidental event, such as a burst pipe.

Is damage from sewer backup or sump pump failure covered?

Most homeowners insurance policies will not cover damage from sewer backup or sump pump failure. You need to have additional water backup coverage within your homeowners insurance policy.

Why isn’t flood damage covered by standard policies?

Flood damage is typically not covered by standard policies. However, you can purchase separate flood insurance. Even if you don’t live in an area that is flood prone, it is advisable to have flood insurance because floods are the most common and costly natural disasters in the United States.

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photo credit: iStock/coldsnowstorm

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SOPRO-Q326-018

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If you own a home, you should have homeowners insurance. (And in some cases, your mortgage lender may even require it.) That’s because this type of coverage can help you pay for losses and damage to your home and belongings if the unexpected occurs, such as fire, wind, hail, or theft.

Homeowners insurance includes property and liability coverage. But it doesn’t cover every situation, so it’s important to read your policy’s fine print. Dive in to learn more.

Property Coverage Explained

Most homeowners insurance policies include two categories of coverage: property coverage and liability coverage. Four types of property coverage include dwelling, other structures, personal property, and loss of use. Here’s a closer look at each.

Coverage A: Dwelling

Dwelling coverage covers your house structure. This includes things such as walls, floors, roof, windows, attached garages, and attached porches. It also includes built-in components, for example, furnaces or fireplaces.

Coverage B: Other Structures

Other stand-alone structures of your home, including sheds, detached garages, or fences, are also covered. If one of these structures is damaged from things such as fire, snow, wind, or hail, the insurance company would pay to repair it, minus your deductible.

Tip: Homeowners insurance involves a lot of terms, so check out a homeowners insurance glossary if you are confused.

Recommended: Condo Insurance

Coverage C: Personal Property

Your personal property, which includes your personal belongings such as furniture, clothes, art, jewelry, and sports equipment, is covered under homeowners insurance if items are stolen or destroyed by fire, hurricane, or other insured disasters. The coverage for personal property is generally 50-70% of the insurance you have on the structure of the house, according to the Insurance Information Institute.

Your homeowners insurance may even cover personal belongings that are stored outside of the home. However, there may be a limit for this coverage. Expensive personal items including art, jewelry, collectibles, and other household items are often covered, but there is usually a dollar limit if they are stolen. Taking inventory of your belongings can help you determine how much insurance you need.

In most homeowners insurance policies, personal property coverage works differently than other types of coverage. A policy typically only covers personal property damage from disasters that are listed, instead of from any cause that isn’t excluded.

These disasters are called “perils” and may include an array of events or occurrences — from smoke, fire, and lightning to vandalism, theft, and damage from aircraft or vehicles. Ask your insurance company for a list of perils.

Recommended: What Is Condo Insurance?

Coverage D: Loss of Use

Loss of use coverage helps pay temporary additional living expenses while your home is being repaired due to damage from a covered claim. Loss of use coverage could pay for things including hotel stays, food, or other expenses incurred in the event your home is deemed uninhabitable after a covered disaster. However, if your home is damaged from a disaster that is not covered under your homeowners insurance, such as a flood, then your insurance won’t pay for loss of use.

Recommended: Using Homeowners Insurance for Tree Removal

Liability Coverage Explained

The other type of homeowners insurance coverage is liability coverage. Liability coverage includes personal liability and medical payments to others.

Coverage E: Personal Liability

Personal liability coverage helps if you or a family member are responsible for injuring someone else or damaging their property. This coverage also extends to damage done by your pets, for example, if your dog bites someone.

Personal liability coverage pays for the cost of defending you or your family member in court and for any damages a court rules that you must pay. Liability insurance doesn’t have a deductible like other types of coverage. And it won’t cover damages due to certain things such as criminal acts, harm that is caused on purpose, or injuries or damage from a car accident.

Recommended: Mobile Home Insurance

Coverage F: Medical Payments to Others

Medical payments coverage helps pay for minor expenses if a guest is injured on your property, regardless of fault. It may also cover injuries that occur away from your home if you or a household member is liable.

Typically, you will not receive coverage for exclusions, such as car accidents or intentional acts of harm.

Recommended: Fire Damage and Insurance

What Does Homeowners Insurance Typically Not Cover?

If you’re buying homeowners insurance, you’ll want to double-check what your policy will and will not cover. In many cases, you’ll get protection for damages due to fire, lightning, wind, and hail. But oftentimes, insurance companies won’t cover damages due to floods and earthquakes, wear and tear, maintenance issues, intentional acts, or war.

Recommended: Does Homeowners Insurance Cover Theft

Flood and Earthquake Damage

Homeowners insurance does not cover damage due to floods or earthquakes, though you can purchase separate flood insurance or earthquake insurance.

If you live in an area that experiences floods, hurricanes, earthquakes, or other natural disasters, you may want to look into additional homeowners insurance options. Be sure to do your research to find out what flood insurance covers when selecting policies.

Wear and Tear/Maintenance Issues

Damages or issues due to wear and tear, neglect, or not properly maintaining your home are not covered under most homeowners insurance policies. For example, homeowners insurance covers roof leaks if the leak is due to things such as storms or a falling tree. But it generally won’t cover a roof leak due to typical wear and tear or lack of maintenance.

Certain Other Perils

Certain other perils, for example, intentional acts, nuclear hazard, or government actions such as war, are also not covered under typical homeowners insurance policies.

Recommended: Hazard Insurance vs Homeowners Insurance

The Takeaway

If you own a home, homeowners insurance is important to have. But don’t assume that it will cover all damages. If your home is damaged from an event that’s not covered, such as a flood, earthquake, or war, you will likely have to pay for the repairs and other associated costs yourself (unless you have supplemental insurance).

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

Find affordable homeowners insurance options with SoFi Protect.

FAQ

What are the main parts of a homeowners policy?

Homeowners insurance provides both property and liability coverage. The main parts of a homeowners policy include dwelling, other structures, personal property, loss of use, personal liability, and medical payments to others.

Does home insurance cover other buildings on my property?

Home insurance covers other stand-alone structures on your property, including sheds, detached garages, or fences. Attached garages are also covered.

How are my belongings covered differently from my house?

Personal belongings, such as furniture, clothes, and art, are covered under homeowners insurance if they are stolen or destroyed by disasters that are listed. Personal belongings that are stored outside of the home may also be covered, but there could be a limit. The coverage for personal property is generally 50-70% of the insurance you have on the structure of the house.

What liability protection does home insurance provide?

Homeowners insurance includes liability coverage for personal liability and medical payments to others. Personal liability coverage helps if you or a family member are responsible for injuring someone else or damaging their property. Medical payments coverage kicks in if a guest is injured on your property, regardless of fault.

Are natural disasters like floods or earthquakes covered?

Homeowners insurance often does not cover natural disasters such as floods or earthquakes. If you live in an area that experiences floods, hurricanes, earthquakes, or other natural disasters, you may want to look into additional homeowners insurance options.

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Photo credit: iStock/Anchiy

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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