Important Things To Know About Your Home Insurance Policy
The home insurance policy is one of the most misunderstood policies that an individual can purchase. Many changes to this type of insurance policy have occurred through the years. These changes were made to expand what is covered and also to clarify what is not covered (excluded).
Our dedicated protection team will guide you through this selection process. We will make sure you are comfortable with the various provisions and coverages within the homeowner’s insurance policy.
To be very clear, the ultimate purpose of homeowners insurance is to enable the homeowner to rebuild his or her home and life, even in the event of total destruction.
A good homeowners insurance policy will cover:
- Your residence
- Any detached structures, like garages, fences, or garden sheds
- Your personal belongings
- Additional living expenses in the event of a loss
- Personal liability
- Medical expenses to others who may be injured on your property
- Identity Theft
- Water Backup of Sewer and Drains
Huff Insurance will provide you with the most comprehensive home insurance policy available on the market today which will help to put your life back in order in the event of a catastrophic loss.
Not all home insurance policies are alike.
To be sure, there are many homeowners insurance companies in the market today that will quote an inexpensive policy, but most of them are only giving you the “bare bones” coverage. The slick talking lizard comes to mind here…. When quoting your home insurance premium, we will use a full replacement cost valuation to be sure that you can replace your home in the event of a total loss.
We will also make sure you are clear about any areas of the insurance policy that have limitations and exclusions. Items such as earthquakes, landslides and floods are excluded from the policy but may be purchased separately.
Other items such as jewelry, coins and collectible items have limitations in the policy but can be added by providing appraisals and paying a small additional premium.
Home Insurance Discounts
Discounts are available for newer homes, central station alarm systems and higher deductibles. Check Out Our 10 Ways To Save On Your Homeower’s Insurance
As you can see, the protection team at Huff Insurance understands the way home insurance works. Let us identify the kind of policy and coverage you need when obtaining premium quotations to find the best values.
The 10 Most Important Insurance Terms to Know in Your Home Insurance Policy
When you’re looking through your home insurance policy, it’s easy to get lost in all the jargon. Understanding key home insurance terms can help you feel more confident about your coverage, making sure you know exactly what you’re paying for and what’s protected. Let’s break down the 10 most important insurance terms you need to know when reviewing your home insurance policy.
1. Premium
Your premium is the amount you pay to keep your home insurance policy active. You can think of it as a membership fee for coverage. Premiums can be paid monthly, quarterly, or annually, depending on your provider. This amount varies based on factors like the value of your home, location, and coverage options.
2. Deductible
The deductible is the amount of money you’re required to pay out of pocket before your insurance company starts covering the rest of the claim. For example, if you have a $1,000 deductible and your repair costs $10,000, you’ll pay $1,000, and the insurer will cover the remaining $9,000. A higher deductible typically means lower premiums and vice versa.
3. Liability Coverage
Liability coverage protects you financially if someone is injured on your property and decides to sue. It can also cover damages you or your family accidentally cause to other people’s property. This coverage is crucial if you want to avoid paying hefty legal fees or medical bills out of pocket.
4. Dwelling Coverage
This is the part of your home insurance policy that covers the structure of your home itself — the walls, roof, floors, and any attached structures like a garage. If your house is damaged by a covered peril (like a fire or windstorm), dwelling coverage helps pay for repairs or rebuilding.
5. Personal Property Coverage
This term refers to the coverage that protects the belongings inside your home — think furniture, appliances, clothing, and electronics. If a covered event, like theft or a natural disaster, damages or destroys your personal property, this coverage helps you replace those items.
6. Replacement Cost vs. Actual Cash Value (ACV)
When filing a claim, you’ll often see these two terms, and they make a big difference. Replacement cost means your insurance will cover the amount it would take to replace an item with a new one of similar kind and quality. Actual cash value (ACV) factors in depreciation, meaning you’ll only get reimbursed for the item’s current market value. Replacement cost provides better protection but might come with higher premiums.
7. Loss of Use (Additional Living Expenses)
If your home becomes uninhabitable due to a covered event, Loss of Use coverage helps pay for additional living expenses, such as hotel stays, meals, and even rental costs. This ensures you’re not left without a roof over your head while your home is being repaired.
8. Exclusions
Every home insurance policy has a list of exclusions — events or damages that your policy does not cover. Common exclusions include flooding, earthquakes, and neglect-related damages. It’s important to review your policy’s exclusions closely and consider purchasing additional coverage, like flood insurance, if needed.
9. Endorsements (Riders)
An endorsement, sometimes called a rider, is an optional add-on to your existing policy that provides extra coverage. For instance, if you own valuable jewelry, artwork, or electronics, an endorsement can cover the full replacement cost if they’re stolen or damaged. It’s a way to customize your policy to better fit your needs.
10. Perils
Perils are the specific risks or events your policy covers. Common perils include fire, theft, windstorm, and vandalism. Policies often cover either named perils (only events specifically listed) or open perils (everything is covered unless specifically excluded). Knowing which perils your policy covers can give you peace of mind and help you assess if additional protection is necessary.
Final Thoughts
Understanding these 10 important home insurance terms can make a huge difference in how well you understand your policy. By knowing what each term means, you’ll be better equipped to assess your coverage, avoid surprises, and make informed decisions about protecting your home.
If you ever feel uncertain about your home insurance coverage or need help tailoring a policy to meet your unique needs, Huff Insurance is here to assist. Protecting your home is our priority!
Huff Insurance is a full service Independent Insurance Agent located in Pasadena, Maryland. We have been dedicated to Protecting Lifestyles™ since 1960. We offer a full array of Personal Insurance, Commercial Insurance and Life Insurance products. Call us today at 410-647-1111.