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  • The Advice Insurance Team

10 Things You Should Know About Home Insurance

Updated: Aug 24, 2018

Homeowners insurance covers your home, other structures, personal property, loss of use, personal liability, and medical expenses. But, what does this mean? In order to understand your home insurance policy, it is essential that you know the following terms and coverages:

1. Home value

Home value is an estimate of what it would cost to rebuild or replace your home in case of a total loss. Home value is not an estimate of what the home can sell for in the current market. 

2. Other Structures

Other structures are coverages for structures on your property that are not attached to your house, such as a guest house, a non-attached garage, a shed or a fence. 

3. Personal property

Personal property covers your contents inside the house. Including but not limited to furniture, appliances, and clothing and other items.

4. Living expenses

Living expenses are coverages for staying in a location other than your home in case your home is damaged.  

5. Personal Liability

Personal liability covers you against claims of property damage or bodily injury. 

6. Medical Expenses

Medical expenses cover medical attention and payments for injury or damages to others while on your property.

7. Additional Coverages

Additional coverages are options that you can select in a policy to protect yourself against different types of risks or events. Such as equipment breakdown, water back-up/sump discharge, foundation coverage, sinkhole collapse, personal injury, identity fraud expense, enhanced personal property (jewelry, watches, furs and other valuables), and increment of replacement cost. Please note that additional coverages vary and may differ from one insurance company to another.

8. Deductibles

Deductibles are specific amounts of money or percentages that the insured must pay before an insurance company pays for a claim. Homeowners policies have two or three deductibles for windstorm and hail, name storms and for any other loss. Please note that additional coverages vary and may differ from one insurance company to another. Increasing the deductible will reduce your premium but it will also increase the amount of the covered loss that you will be responsible for paying in case of a claim.

9. Construction Risks and Characteristics

Construction risks and characteristics are details about your home that insurance companies consider before issuing an insurance policy or for calculating your annual premium. Construction type, upgrades, repairs, roof age, loss history, square footage of your property’s living area, and the number of stories are some of the characteristics that insurance companies review. Presence of a fire alarm, burglar alarm, or an in-home sprinkler system are characteristics that may qualify you for discounts on your annual premium.

10. Flood insurance is NOT included in your homeowner’s insurance policy.

Flood insurance is not included in your home insurance. Flood insurance policies are sold separately and can be purchased from an independent insurance agency.

Weather events, damages, and other situations can be financially and emotionally devastating. Our team encourages you to evaluate your risks and consider acquiring additional coverages for your home. We also encourage you to consider buying a flood insurance policy that protects your home.