Are You Insured for Replacement Cost or Cash Value?
Replacement cost is usually the safest option for both your home and your possessions because it's the amount you would pay for a new item at today's costs.
(Cash value means replacement cost minus depreciation, so you would pay the difference between the depreciated value and the cost of the new replacement item.)
Is Your Home Covered for Flooding?
Homeowners typically need a separate policy to cover flooding and other water-related events such as mudslides.
Flood insurance is available both privately and through the federal government's National Flood Insurance Program (NFIP).
What About Other Water Damage?
It depends. If wind tore off part of a roof and rain damaged a home's interior, this would probably be covered under a standard policy, but water damage from a storm surge would most likely
not be covered.
Coverage questions can be especially complicated when it comes to things like groundwater penetration and areas below ground level, such as basements. It's best to check your policy carefully and never assume something is covered.
Some insurers require additional policies with higher deductibles for events such as hurricanes.
Does Your Property Have an "Attractive Nuisance"?
An attractive nuisance could be a swimming pool, swing set, fountain, trampoline, farm equipment, or abandoned vehicles. Basically, anything that a child could wander into and harm themselves with, even if they're trespassing.
Let your insurance company know if you have one on your property and take reasonable precautions. Homeowners are expected to either make the attraction inaccessible to curious children or eliminate the danger entirely, according to NerdWallet.
Note: Some insurers won't cover trampolines at all, even for personal use.
Are Your Service Lines Insured?
The sewer and water lines between your home's footprint and where they meet public infrastructure are often not covered by standard policies, and repairs can be expensive. Many companies now offer additional riders for these items.
Note: Some providers began adding sewer and water line riders to policies by default in recent years. The cost is usually relatively low, but if you don't need the coverage it may be worth checking to make sure you're not already paying for it.
Are You Covered If Your Dog Bites Someone?
It depends on your insurer and the breed of dog.
Insurance companies paid out over $1.1 billion (yes, with a "b") in liability claims for dog bites in 2023. Some companies may not issue policies if the household includes a breed of dog deemed to be dangerous based on bite statistics, or any dog that has a bite history.
Are Earthquakes a Consideration?
Most standard policies don't cover loss from earthquake damage. Earthquake insurance can be purchased separately.
2. Saving Money on Insurance Coverage
How High Is Your Deductible?
A higher deductible typically means lower insurance rates. Seeing as even small claims can result in higher premiums, it may make sense to have a fund set aside to deal with repairs up to a certain amount and keep your deductible at that level.
Are Your Home and Auto Policies From the Same Provider?
You can often get a discount when the same company provides both home and auto coverage.
Does Your Home Have Cost-Reducing Features?
The following are examples of features that might lower your insurance premiums:
- Security system.
- Water leak sensors.
- Newer roof.
- Gated community.
- Interior sprinkler system.
Will Your Provider Offer Other Discounts?
Some insurers offer discounts for long-term customers or for those who have not filed claims for a specific period of time.
Important Coverage Tip: Consider An Umbrella Policy
An umbrella policy extends your home and auto insurance coverage and protects you from personal liability lawsuits. They usually start at $1 million in coverage.
Like everything else, umbrella policy premiums have gone up in recent years, but they're still relatively cost-friendly considering the protection they provide.
* Information is based on typical coverage provided by the most commonly issued policies: HO3 for single family homes and HO6 for condominium units. You can see the list of all HO policy options here.
