Homeowners Insurance

Homeowners insurance is complicated. You can understand what is included and how to better protect your family and property in just a few steps. 

Don't wait until it's too late to learn you were not covered. Read our general guidance and contact your insurance agent to get the insurance coverage that will let you recover after the next disaster.

Why Should I Have Homeowners Insurance? 

Carrying homeowners insurance helps you replace your damaged, stolen, or destroyed personal property, including your home, and includes liability coverage. 

What is Homeowners Insurance? 

Homeowners insurance covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets. 

What does Homeowners Insurance Cover?

What is covered under your homeowners insurance varies based where you live, your insurer, the policy you choose, and the endorsements or riders you add to your base policy.

In general, a base homeowners insurance policy should financially protect your family from losses due to fire, theft, and liability claims against you due to injuries on your property. Your insurance policy should also pay for additional living expenses should you be displaced because of damage to your home. Additional living expenses can include hotel or rental home costs, as well as food. You can increase the limits of these coverages if you choose.

Personal property coverage is also included in a base homeowners policy. Personal property includes all your possessions- furniture, appliance, clothing, etc.

There are limits to what is covered under your homeowners insurance under personal property and you can add additional coverage for jewelry, art, and other valuables, or increase the limits in general.

What is the Difference Between an Insurance Premium and an Insurance Deductible?

An insurance premium is an amount you pay to your insurer each year for insurance coverage. Your insurance premium is the amount debited from your bank account or held in escrow by your mortgage company and paid each month as part of your mortgage payment. Insurance premiums can change each year based on many factors, including the age of your house, the age of your roof, the number of claims you have made, your credit score, the policy endorsements and coverages you choose, and market factors. 

An insurance deductible is the amount of money you will have to pay out of pocket if you have damage and make an insurance claim. An insurance deductible is withheld from your claim amount, leaving you to pay for the rest of the claim amount out of pocket. For example, if your insurance deductible is $2,500 and you have a $10,000 claim for damages, your insurance company will send you a check for $7,500, leaving you to make up the difference of $2,500. 

Some insurance deductibles are percentage based, as with most wind insurance policies. In this case, your insurance deductible is based on a portion of the insured value of your home. For example, if your home is insured for $200,000 and your wind insurance deductible is 5%, your deductible amount would be $10,000.

What Types of Homeowners Insurance are There?

There are two types of homeowners insurance coverages, Actual Cash Value (ACV), and Replacement Cost Value (RCV). 

What is Replacement Cost Value Homeowners Insurance (RCV)?

RCV coverage is what you want to have, if possible. It can be more costly, but it's a better value. It pays to replace items or damaged parts of your home at today's prices with no depreciation.

What is Actual Cash Value Homeowners Insurance (ACV)?

ACV can be more affordable and pays for a similar item at today’s cost minus depreciation. Depreciation is a decrease in value due to wear and tear or age. Your TV or roof can depreciate to a value of nothing ($0.00) after your deductible is factored in.

Is Wind Insurance Included in my Homeowners Insurance?

In coastal states, homeowners will need to add wind insurance. Wind insurance can have many names - wind, hurricane, named storm, or a wind and hail insurance policy. Wind insurance added to homeowners insurance protects against damage from hurricanes, tropical storms, thunderstorms, hail, or wind storms. 

For inland homeowners, wind and hail coverage is likely already part of your base homeowners insurance.

Learn more about wind insurance here. 

What Should be Included My Homeowners Insurance?

Check to see that you have Ordinance or Law endorsement in your policy. Ordinance or Law will pay to bring your home up to the current building code if it is substantially damaged.

Also, look to ensure you have water back up or water and sewer backup coverage, which protects you from the costs of an overflow in your home. Sewer and Water Backup coverage is separate from a flood insurance policy.

If these coverages are not included in your policy, the repair costs will come out of your pocket.

Should I Buy Flood Insurance?

Homeowners insurance does not cover Flood damage in most cases. If your home is in a special hazard flood area (SHFA), you will likely be required to carry flood insurance if you have a mortgage. If you are outside of the SHFA, or near one, flood insurance is highly recommended and likely affordable. One inch of water in your house can cause up to $25,000 in damage making the annual cost insurance a good investment.

How Can I Save Money on My Homeowners Insurance? 

Learn about the steps you can take that can lower your insurance premiums here.

Buy enough homeowners insurance to cover:

-The structure of your home and any additional structures (detached garage, shop, shed, etc.)

-Your possessions (your stuff)

-The cost of additional living expenses if you have to live elsewhere during repairs

-Your liability to others