This article has been adapted from our partners at Cincinnati Insurance.
A homeowner’s policy is much more than just coverage for your home and other structures. Review what your policy covers and why it’s important to ensure proper coverage:
Coverage for Your Home and Other Structures
A homeowner’s policy protects your home’s physical structure from damage or loss.
If you have a mortgage, your lender will usually recommend an appropriate coverage limit for your dwelling. Additionally, both lenders and insurance companies may require an interior or exterior inspection to ensure the home is properly insured to value. “Insured to value” refers to the total cost required to rebuild your home in the event of a complete loss.
Personal Property Coverage
Homeowner’s insurance also protects your personal belongings. Personal property includes items like furniture, clothing, kitchenware, and more if they’re damaged by a covered event (such as a fire). An independent agent, like Van Wyk Risk Solutions, can help you figure out how much personal property coverage you need—and you can always add more if necessary. When deciding on your coverage, here are a few things to keep in mind:
- Take an inventory: Make a list or take photos of your personal items in each room of your home. This will help you estimate the coverage you need, and it provides records in case you ever need to file a claim. Be sure to store this information in a safe place or at a different location. Check out our “How to Create a Home Inventory” checklist here.
- Understand how your policy pays for personal property: Some policies reimburse you based on items’ actual cash value, which means depreciation (wear and tear) is deducted from the total amount. Others offer replacement cost coverage, which doesn’t account for depreciation but may cost more upfront. It’s important to understand which type your policy provides.
- Get extra coverage for high-value items: Many homeowner’s policies set limits on certain categories of items, like jewelry, silverware, wine, or firearms. Knowing these limits helps ensure you’re properly covered. If you have items worth more than your policy covers, you may need to schedule them (insure them separately) to provide additional protection.
Personal Liability
Another important part of a homeowner’s policy is personal liability coverage. This protection helps you if someone gets injured on your property and holds you responsible, like in the case of a slip and fall. Personal liability coverage can help pay for any settlements or court costs. If you want additional coverage beyond what your homeowner’s policy offers, you can purchase an umbrella policy, which provides extra protection for both your personal liability and auto liability. To figure out how much coverage you need to protect yourself and your family, be ready to share a list of your assets when you talk to your agent.
Additional Living Expenses
Additional living expenses, also known as loss of use coverage, helps you pay for temporary living arrangements if your home becomes unsafe to live in after a covered loss. This can include costs for hotel stays, meals, and laundry services. Most standard homeowner’s insurance policies provide a specific limit for these expenses, but some insurance companies allow you to buy additional coverage. If you live in an area that is prone to natural disasters, getting extra coverage might be especially important.
Additional Coverages to Consider
- Flood insurance: While most homeowner’s policies cover some water damage, like from a burst pipe, they typically do not cover flood damage. If your home is in a flood zone, mortgage lenders usually require you to purchase flood insurance. Even if you’re not in a designated flood zone, you may live in an area that is prone to flooding, so it’s a good idea to consider getting a flood policy.
- Earthquake insurance: Standard homeowner’s policies generally do not cover earthquake damage. However, you can often add this coverage as an endorsement or purchase it as a separate policy.
- Water backup: It’s important to know what water losses your homeowner’s policy covers because not all policies protect against water that backs up through drains or overflows from sump pumps. This coverage is usually available as an additional endorsement.
- Service line: This type of coverage protects you from potentially high repair costs for utility lines related to water, waste disposal, electricity, heating, communications, or compressed air. Some insurance companies offer this coverage as an endorsement.
Next Steps
It’s always best to talk over any questions about your homeowner’s policy with your insurance agent. Feel free to give us a call or contact us via the form below today, and check out our Personal Solutions page to learn more about the risk management services we offer to families like yours.
Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your insurance agent.
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