Homeowners' Insurance
Coverage Options

Dwelling Coverage

  • Covers: The structure of your home, including walls, roof, and built-in appliances.
  • Consider: Ensure coverage is enough to rebuild your home at current construction costs.

Other Structures Coverage

  • Covers: Detached structures on your property, such as garages, sheds, and fences.
  • Consider: Typically, this is a percentage of your dwelling coverage (e.g., 10-20%).

Personal Property Coverage

  • Covers: Your personal belongings, such as furniture, clothing, electronics, and appliances.
  • Consider: Create an inventory of your belongings to determine the amount of coverage needed. High-value items like jewelry or artwork may require additional coverage.

two story home with landscaping

modern kitchen

Loss of Use/Additional Living Expenses (ALE)

  • Covers: Additional living expenses if your home is uninhabitable due to a covered loss, such as hotel bills, restaurant meals, and other costs.
  • Consider: Ensure you have enough coverage to maintain your standard of living while your home is being repaired.

Liability Coverage

  • Covers: Legal expenses, medical bills, and damages if someone is injured on your property or if you cause damage to someone else’s property.
  • Consider: Higher limits may be necessary if you have significant assets to protect.

Medical Payments Coverage

  • Covers: Medical expenses for guests injured on your property, regardless of fault.
  • Consider: This is typically a smaller amount, such as $1,000 to $5,000.

Optional/Additional Coverages

  • Flood Insurance: Standard homeowners policies do not cover flood damage. If you live in a flood-prone area, consider purchasing a separate flood insurance policy.
  • Earthquake Insurance: Standard policies typically do not cover earthquake damage. If you live in an earthquake-prone area, consider this additional coverage.
  • Sewer Backup: Covers damage from sewer or drain backups.
  • Identity Theft: Covers expenses related to restoring your identity if it’s stolen.
  • Home Business: If you run a business from home, you may need additional coverage for business equipment and liability.

Determining Homeowners' Insurance Needs

Assess Your Home’s Value

  • Reconstruction Cost: Ensure your dwelling coverage is sufficient to rebuild your home at current construction costs, not just market value.

Evaluate Personal Belongings

  • Inventory: Create a detailed inventory of your personal belongings to determine the amount of personal property coverage you need.

Consider Your Lifestyle

  • Home Use: If you have a home office, pool, or other special features, you may need additional coverage.
  • Pets: Consider higher liability limits if you have pets, especially dogs, as they can increase your liability risk.

Review Local Risks

  • Natural Disasters: Evaluate the risks in your area, such as floods, earthquakes, hurricanes, or tornadoes, and consider additional coverage accordingly.

Financial Situation

  • Assets: Ensure your liability coverage is high enough to protect your assets in case of a lawsuit.
  • Budget: Balance the cost of premiums with the coverage you need. Higher deductibles can lower your premium but require you to pay more out-of-pocket in the event of a claim.

Peace of Mind

  • Comfort Level: Consider how much risk you’re comfortable with. Some people prefer to have more coverage for peace of mind, while others might be comfortable with just the basics.

Example Scenarios

  • New Homeowner: You might need dwelling, other structures, personal property, loss of use, liability, and medical payments coverage. Consider adding flood or earthquake insurance if relevant.
  • Home with High-Value Items: Ensure you have sufficient personal property coverage and consider additional riders for high-value items like jewelry or artwork.
  • Home Business Owner: Consider additional coverage for business equipment and liability.

Final Steps

  1. Get Quotes: Compare quotes from multiple carriers to find the best rates.
  2. Review Policies: Look at the details of each policy, including limits, deductibles, and exclusions.
  3. Consult: Don’t hesitate to ask questions or seek advice from your independent insurance agent.