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  • Alexander Wissel

Learn the Secrets of Smart Homeowners Insurance

Protect Your Home Like a Pro!

  • Readers will learn about the different coverages offered by homeowners insurance, including dwelling coverage, additional structure coverage, personal property coverage, liability coverage, and additional living expenses coverage.

  • They will understand the factors to consider when choosing homeowners insurance, such as coverage limits, deductibles, policy exclusions, and potential discounts.

  • Readers will be encouraged to regularly review and update their policies to ensure they have adequate protection for their home and belongings.


Homeowners Insurance Protects You - Source: Pexels.com
Homeowners Insurance Protects You

I sold homeowners insurance for almost 8 years. For many people it feels like a waste of money; but as someone who helped pick up the pieces after an accident I can tell you it’s horribly important.

Homeowners insurance is something that protects what is most likely you largest investment. So let’s take a few minutes and learn a little more about homeowners insurance and what you need to consider when buying it.


Home insurance is valuable protection for your most significant asset. There are multiple reasons why home insurance is essential – and may be required by your mortgage company –in safeguarding against unexpected disasters. Learn how home insurance covers damages, liabilities, and additional living expenses. Don't underestimate the significance of home insurance.


Understanding Homeowners Insurance Coverage


Today’s homeowner policies are written on an all risks basis. This means they protect your home against almost everything with a few exceptions. Let’s go over some of the coverages and how they are broken out.

Dwelling Coverage


If your house suffers damage from perils such as fire, windstorms, or vandalism, dwelling coverage helps pay for the necessary repairs or rebuilding. This specifically covers the structure of your home itself.

The value is based off of rebuilding estimates for your home. Depending upon your coverage type – some policies are written on a ‘full replacement cost’ which covers up to the dwelling coverage while others a ‘guaranteed replacement costs' which cover the cost no matter how high it goes.


Some policies have a Dwelling plus feature which adds additional replacement value up to 25% or 30% more. At the end of the day your biggest concern should be a guaranteed replacement of your home should something happen to it.

Pro Tip:

You need to ask your agent whether you have a true guaranteed replacement or just coverage to the policy limit. Ask your insurance agent whether your policy would cover the cost to rebuild if the rebuilding costs twice the dwelling value. That should provide your answer.

Additional Structure Coverage


This coverage is based off a percentage of the main dwelling coverage and covers additional structures like detached garages or sheds.

Personal Property Coverage


This protects your personal belongings, including furniture, electronics, clothing, and more. If these items are stolen, damaged, or destroyed due to covered perils, personal property coverage helps reimburse you for their value.

Most personal property coverage is based on the amount of the Dwelling Coverage. Most of the time it’s 75%-85% of the main home value. If you have a lot of nice things you need to ask your agent if you have enough coverage. Check to see if there are any per item replacement limits.

Liability Coverage


Liability coverage is crucial in case someone is injured on your property and holds you responsible. This kind of accident can happen at any time. Did your friend trip on your steps and break a leg? Did a delivery driver or neighbor hurt themselves on your walk… this covers you.


It helps cover legal fees, medical expenses, and damages if you're found liable for the incident. Liability generally doesn’t cover you and your family in the event of an accident.

Additional Living Expenses Coverage

If your home becomes uninhabitable due to a covered peril, this coverage assists with temporary living expenses, such as hotel bills, meals, and transportation, until your home is restored. Some policies will cap this in a per day amount.

Policy Factors to Consider

When choosing homeowners insurance, it's important to keep these factors in mind:


Coverage Limits:


Understand the maximum amount your policy will pay for each coverage type. There may be a limit to personal belongings that doesn’t take into account their true value.

Deductibles:


Deductibles refer to the amount you're responsible for paying before your insurance kicks in. So if you have a $1000 deductible, you’ll pay for the first $1,000 and your insurance company will pay the rest. Consider your financial situation and choose a deductible that strikes a balance between affordability and coverage cost.

Ask your agent how much a change in deductible will affect your premium ( another way to say your annual bill) to see if lowering it makes sense.

Policy Exclusions:


Review the policy carefully to identify any exclusions. Some events, such as floods or earthquakes, may require additional coverage or separate policies. Make sure you have adequate protection for the specific risks in your area.

Water damage is generally excluded for all standard home policies. You may be able to add sewer & drain backup or a mechanical breakdown that adds some coverage due to water damage – ask your agent. Water damage is generally considered to be so destructive that it is only covered under a flood policy underwritten by the government.

If you are in a flood zone, you may be required to buy flood insurance by your mortgage company.

Discounts and Bundling:


Explore potential discounts offered by insurance providers. Bundling your homeowners insurance with other policies, such as auto insurance, can often lead to reduced premiums.

There’s a reason for this. Policyholders are substantially less likely to place a claim if they have two or more policies with an insurance company.

Homeowners Insurance is Important

Remember to regularly review and update your policy to ensure it aligns with any changes in your home or circumstances. Stay proactive in securing your most valuable asset and make informed decisions when it comes to homeowners insurance.

Homeowners insurance is important – it’s one of the best ways to protect your home, belongings, and financial well-being. By understanding the coverage options, policy limits and choosing the right policy for your needs, you can confidently protect your home and enjoy peace of mind.

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