Homeowners Insurance
Home insurance that matches real replacement costs
Homeowners insurance is high value because property replacement costs and liability exposure can be large. The key is setting dwelling coverage correctly and closing common gaps (flood, earthquake, sewer backup, high-value items).
Key coverages inside a homeowners policy
Covers the structure. Should be based on replacement cost, not market value.
Detached garage, shed, fences. Often a percentage of dwelling.
Furniture, electronics, clothing. Check special limits for jewelry and valuables.
Temporary housing and extra living expenses after a covered loss.
Covers injuries/damages you cause to others. Consider higher limits + umbrella coverage.
Small payments for injuries to guests, often regardless of fault, to reduce lawsuits.
Replacement cost vs actual cash value
Replacement cost coverage generally pays to repair/replace without depreciation. Actual cash value (ACV) factors in depreciation, resulting in smaller claim payments. Verify whether dwelling and personal property are replacement cost or ACV.
Extra percentage above dwelling limit to help with inflation and rebuild cost spikes (availability varies).
Helps pay to rebuild to updated code after a loss. This is a common high-value endorsement.
Common exclusions and gap coverages
Typically excluded. Consider separate flood insurance depending on your risk zone and lender requirements.
Often excluded. Coverage may be separate or added by endorsement in some markets.
Common endorsement. Helps cover damage from backed-up drains or sump pump failure.
Jewelry, watches, art, and collectibles may have sublimits. Schedule items for broader coverage.