Coverage A
Dwelling — REBUILD cost, not market
Insure to what it would cost to rebuild, NOT what the home is worth. Land doesn't burn. Get an actual rebuild estimate from your insurance carrier.
Homeowners Insurance · the basics
Cover the catastrophe.
Reserve for the rest.
Lenders require homeowners insurance. Most buyers under-insure on dwelling rebuild cost or over-pay for a low deductible. Here's the basics — for the full breakdown see our /homeowners-insurance deep-dive.
· The basics
Six coverages.
All in one policy.
Coverage B-D
Other structures + personal property + loss of use
Detached structures (garage, shed). Your stuff inside the house. Hotel + meals if you can't live there during a covered claim. Standard coverage levels are usually fine.
Coverage E-F
Liability + medical to others
Someone hurt on your property = lawsuit. Standard $100K-$300K. Most homeowners should run $500K+. Cheap upgrade.
Standard form
HO-3 = the default
HO-3 covers structure on open-perils basis (covers anything not excluded), contents on named-perils. HO-5 is comprehensive (open-perils both). Most owner-occupied homes use HO-3.
· Watch-outs
Four traps
in homeowners insurance.
Pitfall 01
Insuring to market value, not rebuild cost.
$400K market value + $280K rebuild = waste of premium if you insure to $400K. Get the rebuild estimate.
Pitfall 02
Skipping flood insurance because 'not in a flood zone.'
FEMA flood maps are outdated. 25% of flood claims come from 'low-risk' zones. Flood is excluded from standard policy. NFIP costs little if you're not high-risk.
Pitfall 03
Choosing the lowest deductible.
$500 deductible costs significantly more than $2,500. If you have reserves, raise the deductible. Premium savings often pay for themselves in 2-3 years.
Pitfall 04
Forgetting scheduled coverage for valuables.
Standard policy has sub-limits on jewelry, art, electronics, collectibles. Items over the sub-limit need scheduled riders. Inventory the high-value stuff.
Read the policy.
Not just the premium.
Get an LO + insurance partner who walk you through coverage — not just sell you the cheapest quote.