Home Insurance
Homeowners insurance protects your most valuable asset. It covers the structure of your home, your belongings, liability claims, and temporary living expenses if your home is damaged by a covered event.
What Home Insurance Covers
Pays to rebuild or repair your home if damaged by a covered peril such as fire, wind, or hail. Should equal the full replacement cost of your home.
Covers detached structures like garages, fences, sheds, and pools. Typically 10% of your dwelling coverage.
Replaces your belongings (furniture, electronics, clothing) if destroyed or stolen. Inventory your possessions for accurate coverage.
Covers legal costs and damages if someone is injured on your property or you cause damage to others' property.
Pays for temporary housing and extra living expenses if your home becomes uninhabitable after a covered loss.
Covers minor medical bills for guests injured on your property regardless of fault, typically $1,000-$5,000.
What Standard Policies Do NOT Cover
Standard homeowners insurance typically excludes flood damage, earthquake damage, sewer/drain backups, mold (unless caused by a covered peril), normal wear and tear, and pest/termite damage. You will need separate policies or endorsements for flood and earthquake coverage. Flood insurance is available through the National Flood Insurance Program (NFIP) or private insurers.
Money-Saving Tips
- Get replacement cost coverage, not actual cash value (ACV). ACV deducts depreciation and leaves you underinsured.
- Increase your deductible to $2,500 to save 10-20% on premiums, but keep enough in savings to cover it.
- Install security systems, smoke detectors, and deadbolts for premium discounts of 5-15%.
- Review your policy annually and update your dwelling coverage to reflect renovation or construction cost increases.
- Bundle home and auto insurance for a multi-policy discount.
- Ask about discounts for new roofs, impact-resistant shingles, and claims-free history.
Common Mistakes to Avoid
- Insuring for market value instead of replacement cost. Your home's market value includes land, which doesn't need to be insured.
- Not purchasing flood insurance separately. Standard homeowners policies do NOT cover flood damage.
- Underestimating the value of personal belongings. Do a home inventory with photos and receipts.
- Forgetting to schedule high-value items (jewelry, art, collectibles) that exceed standard policy limits.
Key Terms to Know
The amount needed to rebuild your home or replace belongings at current prices, without deducting depreciation.
Replacement cost minus depreciation. You receive less money for older items.
A specific event or cause of loss covered by your policy (e.g. fire, theft, windstorm).
An add-on to your policy that provides extra coverage for specific items or situations not included in the base policy.