A AAA homeowners insurance policy covers the physical structure of your home, your personal belongings, personal liability if you injure someone or damage their property, medical payments for guests hurt on your property, detached structures like garages and sheds, and additional living expenses if a covered event forces you out of the house.1AAA. Guide to AAA Homeowners Insurance Several major risks sit outside that standard coverage, including floods, earthquakes, and sewer backups, though some can be added through optional endorsements.
The Home Itself
Dwelling coverage is the core of the policy. It pays to repair or rebuild the physical structure of your home after a covered event, including the foundation, walls, roof, and built-in systems like plumbing, electrical, and HVAC. Covered perils typically include fire, windstorms, hail, lightning, vandalism, and other events listed in the policy.1AAA. Guide to AAA Homeowners Insurance
AAA bases dwelling coverage on replacement cost, meaning the insurer pays what it actually costs to rebuild without subtracting for depreciation. Your coverage limit has to reflect current construction costs, though. If material prices spike after a disaster and your limit falls short, you pay the difference.
Extended replacement cost coverage adds a buffer above your dwelling limit. AAA’s version typically provides up to 125% of your dwelling coverage, so a home insured for $500,000 would have up to $625,000 available if rebuilding costs exceed the original limit.2AAA. Do You Have Enough Insurance to Rebuild Your Home? Confirm the exact percentage on your policy declarations.
Deductibles
Your deductible is what you pay out of pocket before coverage starts. AAA deductibles commonly fall in the $500 to $1,000 range, with the option to choose a higher amount.3CSAA Insurance Group. Consumer Tips: Ten Questions to Ask Your Insurer A higher deductible lowers your premium and raises your out-of-pocket cost at claim time.4AAA. Home Insurance Deductible – What is It and How Does It Work?
Hurricane-prone areas are different. Your policy may apply a percentage-based deductible for wind damage instead of a flat dollar amount, typically 1% to 5% of the home’s insured value.5AAA. The Ins and Outs of Hurricane Insurance Deductibles On a $400,000 home, a 2% wind deductible means $8,000 before coverage applies. If you live on the coast, check the policy for this so a storm doesn’t blindside you.
Your Belongings
Personal property coverage pays for your furniture, clothing, electronics, appliances, and similar items whether they’re inside your home or temporarily somewhere else, like a storage unit or a hotel room. The limit is usually set as a percentage of your dwelling coverage. If your home is insured for $200,000, personal property coverage might be $100,000 to $140,000.6AAA Club Alliance. Do You Know What Homeowner’s Insurance Actually Covers?
How you’re reimbursed depends on whether your policy uses actual cash value or replacement cost value. Actual cash value subtracts depreciation, so a five-year-old laptop pays out a fraction of what a new one costs. Replacement cost value reimburses the price of buying the same item new. Replacement cost coverage costs more, but the difference matters when you’re replacing an entire household after a fire.
Caps on Valuables
Standard policies limit reimbursement for certain categories of high-value items. Jewelry theft might be capped around $1,000 and collectibles around $2,000, regardless of what those items are actually worth.7AAA Club Alliance. A Guide to Personal Property Insurance for Your Valuables You could have $200,000 in total personal property coverage but recover only a small fraction of that for a stolen engagement ring.8AAA. Do You Have Enough Insurance Coverage to Protect Your Valuables
AAA offers two ways to close that gap. You can raise the sublimit for a category, bumping jewelry coverage from $1,000 to $5,000 if you own several nice pieces but nothing individually extraordinary. Or you can schedule specific items with a personal property endorsement, which lists each piece with an appraised value and covers risks like accidental loss that standard policies exclude.
Liability and Injuries to Guests
Personal liability coverage protects you when you’re legally responsible for injuring someone or damaging their property. It isn’t limited to incidents at home. If your dog bites a neighbor at the park or you break someone’s window with a stray ball, liability coverage can pay for medical bills, property repair, and your legal defense.
Most AAA policies start at $100,000 in liability coverage, with options up to $500,000.9AAA Club Alliance. What is Liability Insurance Legal defense costs, including attorney fees and court expenses, are paid on top of your liability limit even if the lawsuit turns out to be groundless.10AAA. How Much Home Insurance Coverage Do I Really Need Intentional harm and criminal acts are not covered.
Medical payments coverage, sometimes called Coverage F, is separate. It pays for minor injuries to guests on your property regardless of fault. If a friend trips on your porch steps and needs stitches, this coverage handles the bill without anyone having to prove negligence. Limits typically run from $1,000 to $5,000 per incident. Anything more serious falls back on your liability coverage.
Detached Structures
Garages, sheds, fences, gazebos, and other detached structures on your property are covered, usually at 10% of your dwelling coverage. On a $300,000 policy, that gives you $30,000 for repairing or rebuilding them after a covered event. You can raise the limit if your outbuildings are worth more.
The same perils apply as with the main house: fire, wind, hail, vandalism, and other listed events. Wear, neglect, and insect damage are excluded. One wrinkle worth flagging: if you use a detached structure as a short-term rental or run a business out of it, the homeowners policy likely won’t cover it. Converting a backyard shed into an Airbnb may call for a separate commercial property policy.
Living Expenses If You’re Displaced
If a covered event makes your home uninhabitable, loss of use coverage pays for temporary living expenses while repairs happen. AAA sets this at a percentage of your dwelling coverage, commonly around 30%. A home insured for $200,000 would have roughly $60,000 available for relocation costs.6AAA Club Alliance. Do You Know What Homeowner’s Insurance Actually Covers?
Eligible expenses include hotel stays, short-term rental housing, storage fees, increased commuting costs, pet boarding, and laundry services. The key word is “increased.” The policy only reimburses costs above what you’d normally spend. If you usually spend $200 a week on groceries but spend $350 eating out because you have no kitchen, only the extra $150 is covered. Keep every receipt. AAA typically reimburses on a rolling basis rather than in a lump sum.
What AAA Homeowners Insurance Doesn’t Cover
Several major categories of damage fall outside a standard AAA policy. Some of the most expensive disasters a homeowner can face sit in this list.
- Flood damage from rising water, storm surge, and overflowing rivers requires a separate flood policy, often through the National Flood Insurance Program. Homes outside designated flood zones can still flood.
- Earthquake damage requires a separate policy or endorsement, which AAA may offer in applicable regions.
- Water backing up through sewers or drains is excluded from standard coverage but can be added as an endorsement.
- Gradual deterioration such as aging shingles, rusting pipes, cracking foundations, and fading paint is treated as maintenance, not an insurable event.
- Mold from long-term moisture exposure and damage from termites or other insects are typically excluded.
- Acts of war, whether declared or undeclared, and nuclear hazards are not covered.
- Damage or seizure caused by government action is not covered.
- Any loss you cause deliberately is excluded.
Flood and earthquake are the exclusions that surprise homeowners most often. If you live in an area exposed to either, pricing out separate coverage before the season starts is worth the phone call.
Endorsements That Fill the Gaps
Optional endorsements add coverage for specific risks the base policy excludes. Each one costs extra, and each targets a loss that could otherwise land entirely on you.
Water Backup
This endorsement covers damage when water backs up through sewers or drains, or when a sump pump overflows. Through at least one regional AAA affiliate, it provides up to $5,000 in coverage with a $500 deductible.11AAA. Water Back Up and Sump Overflow A single basement flood from a backed-up sewer can cause tens of thousands in damage, which makes this one of the more cost-effective add-ons available.
Equipment Breakdown
Standard policies cover damage from external events, not mechanical failure. If your HVAC system, water heater, or refrigerator fails from an internal malfunction, equipment breakdown coverage pays for repair or replacement. It’s most useful for expensive built-in systems.
Scheduled Personal Property
Scheduling individual high-value items like engagement rings, art, or antiques gives them broader coverage, including accidental loss and mysterious disappearance, with no sublimit cap beyond the appraised value.
Ordinance or Law
After a covered loss, local building codes may require upgrades beyond restoring the home to its pre-loss condition. Ordinance or law coverage pays for those required upgrades. Without it, code-mandated improvements during rebuilding come out of your pocket.
Where You Buy It and Whether You Need a Membership
AAA homeowners insurance isn’t sold by a single national company. AAA operates through regional clubs, each affiliated with its own insurance carrier. CSAA Insurance Group, for example, serves parts of more than two dozen states across the West, Mountain West, and Mid-Atlantic regions.12CSAA Insurance Group. Clubs and Counties Other regional affiliates cover different parts of the country, so the specific policy forms, endorsement options, and pricing you see depend on where you live.
You do not need to be a AAA member to buy homeowners insurance through AAA. Policies are available to both members and non-members.13AAA Club Alliance. Pros and Cons of Purchasing AAA Insurance as a Nonmember Membership can unlock additional benefits and discounts, so it’s worth comparing the total cost either way before you decide.