How to Buy Homeowner's Insurance
Hitting the High Points of the Property & Casualty Insurance Policy
Learn more about the property & casualty insurance policy today. Some quick insurance facts to help decide what the best homeowner's insurance coverage is for your home.
To get a better understanding of your homeowner's insurance policy, talk to your insurance agent or a licensed agent at your insurance company. They can discuss the ins and outs of the property and casualty insurance policy, including insurance coverage, limits, and exclusions. Research homeowners insurance policy information at state departments of insurance and at consumer-oriented sites.
- Homeowner's insurance policy coverages: actual cash value vs. replacement cost. We'll start off with actual cash value and replacement cost, because if you don't specify this in the beginning, you could be in for some serious trauma if you have a homeowners insurance claim. Simply put, actual cash value includes depreciating the value of items at the time of the insurance claims assessment. The depreciation calculation varies by the item insured, the insurance company and the individual claims adjuster.
- Replacement cost value does not depreciate the value of items insured at the time of the insurance claims assessment. Replacement Cost is the actual cost to replace an item destroyed or damaged in the event of a covered loss. Replacement Cost increases the cost of the property insurance policy. But if you ever need to file an insurance claim, you'll be glad you have it. Receipts, video, and itemized inventories can make your insurance claims process an easier and faster one.
- What's included in your homeowner's insurance policy- building: Your property insurance policy usually includes Fire, Lightning, Wind and Vandalism. A limited extension of coverage for outbuildings is included in your homeowners insurance, too.
- What's included in your property and casualty policy- personal property insurance: Contents insurance or personal effects insurance covers most of the items in your home, including furniture. A limited extension of insurance coverage for personal property off-premises (i.e., personal effects in your kid's dorm room or in your car) is included in your personal property insurance, too.
- What's excluded from your homeowner's insurance policy. PCs and phone systems are generally excluded, although you may be able to get special limits on these items. Wear and tear, backed-up sewers and earthquakes are almost never covered by a property and casualty insurance policy. Clearly, anything fraudulent won't be covered by your personal property insurance, either.
- Special limits in your property and casualty insurance policy. Glass, jewelry, furs, and most of your valuable collectibles only receive a minimal pay-out from your personal property insurance if damaged by a covered loss and reported in a homeowner's insurance claim. But, these items can be added to a "rider" (also known as scheduled personal property insurance or a personal property insurance floater) for policyholders who need broader insurance coverage.
Before you buy homeowner's insurance, review information available at state property insurance associations and your state department of insurance.
- Your state Department of Insurance provides consumer information about property insurance.
- The Insurance Information Institute provides more information about homeowners insurance for consumers.
Learn more about the latest homeowners' news and updates on the insurance blog.
Talk back with the article's author: email Lisa Nichols and tell her about your homeowners insurance claims experience.
The copyright of the article How to Buy Homeowner's Insurance in Home/Property Insurance is owned by Lisa Nichols . Permission to republish How to Buy Homeowner's Insurance must be granted by the author in writing.
