What Illinois homeowners insurance covers, and the three gaps we close on almost every policy.
Illinois doesn't require homeowners insurance by law, but your mortgage lender does, and the bank only cares that the loan is protected. A policy that satisfies the lender can still leave you with a flooded basement, a depreciated roof payout, or a liability limit that stops long before a lawsuit does. Here's how a good policy is actually built.
The six parts of a standard HO-3 policy
A typical homeowners policy has six coverages: dwelling (the structure), other structures (detached garage, shed, fence), personal property (your stuff), loss of use (a hotel or rental while repairs happen), personal liability (someone gets hurt on your property or you cause damage elsewhere), and medical payments to guests. Everything else, flood, water backup, ordinance and law, scheduled jewelry, is an endorsement you choose to add.
The number that matters most is the dwelling limit. It should equal what it would cost to rebuild the house with today's current local labor and material prices, not the purchase price, not the tax assessment, not the Zillow estimate. We run a replacement-cost estimate on every home we quote, because an underinsured dwelling is the most expensive mistake a homeowner can make.
Gap #1: sump pump failure and sewer backup
Standard policies exclude water that backs up through drains or overflows a sump, and across much of the Midwest, with high water tables and spring storms, that's the single most common basement claim we see. A water backup endorsement is inexpensive and we recommend it on nearly every finished basement we insure.
Gap #2: how your roof gets paid
Wind and hail are the biggest property claims in northern Illinois. Many policies now pay roofs at actual cash value, replacement cost minus depreciation, so a 15-year-old roof torn up by a June hailstorm might pay out half of what a new one costs. We'll show you exactly how your policy treats the roof, what a replacement-cost option adds, and whether your roof's age is quietly costing you on the premium.
Gap #3: liability that stops too early
A trampoline, a pool, a dog, a teenage driver, a kid's friend on the deck, home liability is where lawsuits land. Many policies default to $100,000 or $300,000. For most homeowners with equity and income to protect, we pair the home policy with a personal umbrella that adds $1 million or more across home and auto for a surprisingly small premium.
Flood is separate, and it matters here
Homeowners insurance never covers flooding from rising water, a swollen river or creek, a lake overflowing after a spring thaw. Plenty of homes sit in mapped flood zones and plenty more outside the zones flood anyway. We can write a separate flood policy through the Farmers family and the National Flood Insurance Program, and we'll tell you honestly whether your address is one where it makes sense.