Home Insurance

We've partnered with Hippo Insurance to give you an affordable rate on your homeowners insurance!

Get a Quote

What is home insurance?


If you're one of the 65% of Americans who own a home, you understand the immense financial investment that is homeownership. It is often the end result of years of saving, work, and sacrifice. After all this effort, you need to make sure your investment is thoroughly protected. And that's where we come in. Let's get into the finer details of home insurance to help you protect your investment.


In this article, we will discuss:

  1. What is covered by my policy?
  2. How much coverage do I need?
  3. What's a deductible and why does it matter?
  4. What's actual cash value?
  5. What are some additional coverage policies I can have?
  6. What's some advice for first-time owners?
  7. Okay, I think I understand. Where can I buy a policy?




What home insurance covers?


Firstly, a home insurance insurance is typically broken down into six parts:


  • Dwelling: This is your house and any attached structures, such as your garage.
  • Other structures: This means any stand-alone structures, such as a carport or tool shed, not attached to your home. This would be considered a part of “other structures” to an insurance company.
  • Personal property: This pays to repair or replace your belongings/property that are stolen or damaged in a covered loss anywhere in the world.
  • Additional living expenses: This is sometimes called loss of use clause, meaning this helps pay for a temporary relocation in the event you are unable to live in your home due to rebuilding or repairing.
  • Personal Liability: This covers you if you are found responsible for another’s injuries on our property or away from home.
  • Medical payments: Covers medical costs to people at your residence that aren’t a resident of the household, regardless of fault.

Policies: HO-2 vs. HO-3


Looking further, let’s consider the different types of homeowners policies and how these types affect your coverage. Most standard homeo policies are what insurance companies call HO-2 or HO-3 policies. An HO-2 policy is considered a named peril policy,meaning all accidents that could be covered are named within your policy. Typically, this includes:

  • Fire
  • Lightning
  • Theft
  • Vandalism
  • Windstorms and hail
  • Damage caused by vehicles
  • Damage from aircraft
  • Weight of ice, snow, and sleet
  • Freezing of household systems
  • Riots
  • Explosions
  • Falling objects
  • Volcanic eruptions
  • Overflow or discharge of water
  • Damage from artificially-generated electrical current
  • Sudden tearing, cracking or bulging of home

If you want a broader home policy, consider an HO-3 open-peril policy. In this policy, open-peril refers to coverage from all risks except those losses specifically excluded within your policy—your personal property is still covered on a named-peril basis, however. The next tier up for coverage is an HO-5 policy type. Here, both dwelling and personal property are covered on an open-peril basis. You should consider that most insurance companies won’t cover damages against flooding, earthquake, landslides, mold, infestations, wear and tear, nuclear hazards, or government actions—regardless of your policy type.





Coverage Amounts


The amount you spend will depend on the replacement cost of your home. The amount of coverage you have depends on the replacement cost of your home, which your insurance company will usually help you to determine. Consider that replacement cost and market value are not synonymous – replacement value is how much it would cost an insurance company to rebuild your home and replace your belongings, whereas market value is dependent on the real estate market and other variables.

Because the purpose of insurance is to restore the insured asset (your home and property, in this case) to its original state, insurance companies use replacement cost rather than market value to determine the actual dollar value of coverage.


Typical Coverage Limits

Coverage TypeTypical Limit of Coverage
DwellingVaries
Other structures10% of Dwelling Coverage
Personal Property50% of Dwelling Coverage Limit
Loss of Use20% of Dwelling Coverage Limit
Medical PaymentsVaries
Personal LiabilityVaries




Deductibles and home insurance


It’s important to consider the differences between a car insurance deductible and a home insurance deductible. For your home insurance, the amount of your deductible is deducted from your claim payout. For example, if your kitchen catches on fire and incurs $5,000 worth of property damages and your deductible is $1,000, you would receive $4,000 and thus be responsible for the remaining amount. However, car and home deductibles are both inversely related to cost of premium—if you raise your deductible, you lower your premium.


Percentage versus dollar-based

Deductibles can also be dollar-based and percentage-based deductibles. The above example regarding the kitchen fire would be considered a dollar-based deductible. For a percentage-based deductible, however, the monetary value is derived from a percentage of your dwelling coverage. For example, if your dwelling is valued at $367,000 and your wind/hall deductible is 1%, your deductible would be $3,670.





Actual Cash Value v Replacement Cost


Unless your insurance policy specifies otherwise, any claims you are being reimbursed for will be paid out by what's called actual cash value or ACV. Basically, ACV is the amount of money it would cost you to replace your item minus any depreciation. This valuation process will usually be done by your insurance companies claim's department through the claims adjustors.





Additional Coverages


Endorsements and Floaters

Something you may want to consider is what insurance companies refer to as “floaters,” “riders” or “endorsements.” Essentially, a floater is an additional coverage for a high-priced category of an item that exceeds the normal limits on your policy. For example, someone on your home policy owns a very expensive ring that is valued at $10,000. Because most insurance companies cap their coverage for jewelry well below $10,000, you would need an endorsement or floater to help ensure your jewelry is properly covered. While it varies by company, floaters extend to other items as well as jewelry—such as works of art, musical equipment, and even guns.


Identity Theft Coverage

Although a basic home policy doesn’t offer any coverage against identity theft, most companies offer an endorsement to ensure you are financially protected. While it varies per company, coverage ranges from $15,000 to $30,000 per occurrence and typically cost between $25 to $65 per year.


Flood Insurance

Unlike car insurance, the damages resulting from floods are not covered by a homeowner’s policy. Typically, flood insurance is provided by the FEMA or the Federal Emergency Management Agency. Depending on your location, your mortgage company may require you to purchase flood insurance.


Earthquake Insurance

Like damage caused by floods, an earthquake is not a peril or risk that is covered in a typical insurance policy. However, unlike flood insurance, some insurance companies offer a separate policy or endorsement for Earthquake protection. If you live in an earthquake-prone area, speak with your insurance company about earthquake protection.


Wind and Hail Deductible

Some insurance companies have added an additional deductible for wind and hail damage, plus a deductible for your other covered perils. While the impact on your premium is up to you, this additional premium is designed to keep policies affordable.





Our best advice


If you’re shopping for home insurance or even if you already have it, you should consider some simple steps to ensure you’re both properly covered and not overpaying.


Make an inventory of all your items

By going through all your belongings, both big and small, you can adequately determine how much coverage you need. Plus, in the event of a claim, you can quickly determine what is missing and its value.


Update your policy with expensive purchases

Pay attention to coverage limits for specific items. If you purchase a new item that exceeds your policy’s limit, you risk not having sufficient coverage. Consider additional endorsements and floaters with any newly purchased valuable item.


Double check your policy for any policy discounts

While discounts vary per insurance company, typical home policy discounts are multi-policy (home and auto), new roof, claims free, non-smoker, and new home discounts. Look closely at your policy to see if you or your home qualifies for any possible discounts.


Maintain your home

Insurance companies see things like old roofs, mold, and general disrepair as liabilities and will charge you accordingly for them. It is important to maintain the structural integrity of your home to ensure your premiums don’t increase unnecessarily.





These guys are great!

While we don't provide quotes for home insurance, here are some top providers per J.D. Power Ratings:




Not feeling totally sure about insuring your dream home just yet? Don't worry—you can ask an agent just about anything!


Recent Questions:

Home Insurance

Can I use my car insurance to damage to garage door?

Aug 25, 2018

First, can I even do this? Next, is it worth reporting a property damage claim to a garage door? The ...

Isn’t it most cost effective to have cars and home with one company

Aug 21, 2018

Is Zebra a company or a search tool for home and auto?...

Dog bite claim on a home insurance policy

Aug 06, 2018

When the insurance company pays out for dog bites, how does that work? My neighbor’s dog bit my son, caught ...

Cost of sinkhole coverage in Tampa, FL

Aug 02, 2018

Buying property in Tampa. No reported sink holes on the property, but it is within 1/2 mile of a reported ...

Additional Resources:

Home Insurance

Snakes on a Roof! But for Real: How to Snake-Proof Your Home (and Other Tips for Pest Control)
Snakes on a Roof! But for Real: How to Snake-Proof Your Home (and Other Tips for Pest Control)
Jan 05, 2018

When you’re watching nature documentaries or heading to the zoo, wildlife is fascinating and often beautiful. When it makes its...

Amazon Key: The Smart Delivery Solution That No One Wants
Amazon Key: The Smart Delivery Solution That No One Wants
Nov 24, 2017

It’s probably happened to you or someone you know. You’ve ordered a package, and it will be delivered by the...

5 Times You Don’t Need Travel Insurance – and 4 You Do
5 Times You Don’t Need Travel Insurance – and 4 You Do
Nov 15, 2017

If you’ve ever booked a trip, you’ve no doubt run into offers for travel insurance. Airlines, hotels, cruise lines, and...

Get Smart about Sinkholes: Is Your Home Protected?
Get Smart about Sinkholes: Is Your Home Protected?
Nov 08, 2017

There are altogether too many unfortunate scenarios which might cause damage to your home and property, and your home insurance...

13 Halloween Liability Scares You Can Prevent
13 Halloween Liability Scares You Can Prevent
Oct 26, 2017

It’s the time of the year when kids wander the neighborhood taking candy from strangers and people casually wield sharp...

4 Home “Improvements” That Could Actually Reduce Your Home Value
4 Home “Improvements” That Could Actually Reduce Your Home Value
Sep 14, 2017

Once you actually own a home, you’re free to make it into the space that’s perfect for you. It’s exciting...

How to Protect Yourself and Your Home Against Wildfires
How to Protect Yourself and Your Home Against Wildfires
Aug 21, 2017

Ever used the expression “spread like wildfire?” Fire is an incredible force of nature, and while it has its uses...

4 Steps to Take in the Immediate Aftermath of a Home Burglary
4 Steps to Take in the Immediate Aftermath of a Home Burglary
Aug 10, 2017

It’s everyone’s nightmare. You find out someone has broken into your home. You panic at the thought someone might want...

Why You Need to Prepare for Floods (Whether You Live in a Flood Zone or Not)
Why You Need to Prepare for Floods (Whether You Live in a Flood Zone or Not)
Aug 07, 2017

Dozens of major flooding events surface across the U.S. each year – and often in regions (even cities!) that aren’t...

When Should You Shop for Home Insurance?
When Should You Shop for Home Insurance?
Jul 20, 2017

You buy a new mattress every seven years and a new toothbrush every three months. You shop for new running...

Liability Coverage: The Unsung Safeguard of Your Insurance Policy
Liability Coverage: The Unsung Safeguard of Your Insurance Policy
Jun 13, 2017

Okay, let’s start with this: please do not go punch someone in a bar. We’re not endorsing any bad behavior...

CLUE Report: Why Does it Matter for Your Home and Auto Insurance?
CLUE Report: Why Does it Matter for Your Home and Auto Insurance?
Jun 06, 2017

When searching for an insurance policy, it’s important for consumers to do their due diligence and compare quotes before choosing...

Home Security Systems: How to Find the Right One (IF You Need One, That Is)
Home Security Systems: How to Find the Right One (IF You Need One, That Is)
Jun 05, 2017

Most of us think of our homes as a safe space. The idea of a thief violating that space is...

4 Things You Own That Can Get You Dropped from Your Insurance Company
4 Things You Own That Can Get You Dropped from Your Insurance Company
May 31, 2017

The relationship you have with your home or renters insurance company is fundamentally an exchange of responsibility and premium. In...

Your Moving Manual: All the Boxes You Need to Check (and Pack!)
Your Moving Manual: All the Boxes You Need to Check (and Pack!)
May 24, 2017

Moving is a big thrill, a big hassle, and all-in-all, a big deal. For many people, it’s also the biggest...

Managed Retreats: Could They Save Coastal Cities from Environmental and Financial Ruin?
Managed Retreats: Could They Save Coastal Cities from Environmental and Financial Ruin?
May 08, 2017

For many of us, a beachfront home with a view of the sea has often seemed a far-off dream or...

What You Need to Know Before Buying Homeowners Insurance
What You Need to Know Before Buying Homeowners Insurance
Apr 17, 2017

Buying a home is a huge decision many folks make, whether to support a growing family, make a financial investment, or...

3 Big Tips for Garage Safety: Keeping Your Family, Home, and Car Safe
3 Big Tips for Garage Safety: Keeping Your Family, Home, and Car Safe
Feb 08, 2017

Garages protect your cars, motorized toys, sports equipment and even your grill (sans propane) during cold weather, but without proper...

5 Insurance Tips You Need to Know before Renting Your Home on Airbnb
5 Insurance Tips You Need to Know before Renting Your Home on Airbnb
Jan 09, 2017

The sharing economy is currently worth about $26 billion and grows bigger each day. Even with regulations meant to curb...

Is Your Connected Home Smart Enough to Cut Your Insurance Costs?
Is Your Connected Home Smart Enough to Cut Your Insurance Costs?
Dec 02, 2016

Google Home and Amazon Echo: voice-activated assistants making life easier and cozier for families everywhere (ahem, say those heart-warming commercials...

Secrets of the Bundle: When Can You Save by Combining Insurance Policies?
Secrets of the Bundle: When Can You Save by Combining Insurance Policies?
Jun 01, 2016

Nothing can make even the savviest of consumers’ eyes glaze over quite like the phrase “insurance bundling.” And we get...