Homeowner insurance property protection protects your home and personal belongings from damage caused by specific risks.
If you have a home and a mortgage, your lender will require you to have homeowner insurance. If you don't have coverage when you first finance it, the bank may take out an expensive lender-placed insurance policy on the property. If you have coverage and lose it, the bank can also take out a lender-placed insurance policy to protect their investment, so find coverage as soon as possible.
If you don’t have a mortgage, it’s still a good idea to protect your investment and buy homeowner insurance.
How much homeowner insurance do you need?
When deciding how much and what type of coverage you need to insure your home, it's best to talk with your insurance agent or broker. They can help you assess factors such as the average replacement cost of a home in your area with comparable square footage and how to make sure any improvements you've made to your home are also covered. Outbuildings and unattached structures you may have added, for example, may not be covered by a standard homeowner insurance policy.
Replacement cost vs. actual cash value coverage
Know the difference between replacement cost and actual cash value coverage.
- Replacement cost coverage is standard on most homeowner insurance policies. It pays to repair or replace your property at today's cost without deducting for depreciation.
- Actual cash value coverage pays you the amount to replace or repair your property, minus how much it's depreciated. For example, if you bought a TV for $1,000 five years ago and it was damaged in a fire, your policy would pay you the amount your TV is worth today, not what you paid for it.
Keep track of your property's value with a home inventory checklist. Keep this document in a safe place — such as a fireproof safe — or on a backup hard drive in case you need to file a claim.
What a typical homeowner policy covers
When you talk with an agent or broker about homeowner insurance, these types of coverages are usually standard on a homeowner policy:
Dwelling coverage
This typically covers repairing or replacing your damaged or destroyed home, including attachments, such as garages or decks.
Coverage for other structures
This is coverage to repair or replace other permanent, separate, unattached structures on your property. Common examples include a detached garage, workshop or attached fence. Review your policy limits to ensure that you have enough coverage for your other structures.
Talk to your agent about getting additional coverage if you have multiple structures on your property, rent out any of them or use any additional structures for a home business.
Personal property coverage
This includes coverage for your furnishings and personal items, such as your TV, stereo, clothing, dishes, etc. The policy covers your property for its value with depreciation from use (this is also known as actual cash value, or ACV). If you want to be reimbursed for what it costs to replace your damaged property, you'll need to buy replacement cost coverage.
Your policy may limit coverage for certain kinds of items, such as jewelry, collectibles, art, tools, or silver. Talk to your agent about buying additional coverage or increasing your limits.
Loss of use or additional living expenses coverage
This pays for living expenses over and above your normal living expenses if your house is damaged or destroyed and you need another place to stay while it’s being repaired or rebuilt. This could include increased mileage or increases to housing, food and laundry costs.
Home insurance liability protection
This will help cover medical payments for guests, as well as general and personal liability. Liability protection usually includes coverage for:
- Medical expenses of others if they're accidentally injured on your property. Most policies include at least $1,000 of coverage, but you can get higher limits. Generally, this coverage applies only to guests who are on your property with your permission.
- Expenses for bodily injury and property damage that happens to others when you're legally liable. For example, if you knew you had a loose deck railing and someone leaned on it, fell off and was hurt, you can be held liable. Most policies include at least $100,000 of coverage, but higher limits may be available.
- Personal liability coverage beyond your property limits. If an incident occurs involving family members who live with you (as defined in your policy) at other locations, it will cover
Additional coverages you can get
Your policy generally includes additional limited coverage for debris removal and damage to trees, plants and shrubs. It also could include credit card coverage, which protects you if someone steals your credit card and makes unauthorized charges.
There are several major natural disaster risks that standard homeowner policies don't typically cover. If you face these risks, you should talk to your agent or broker about coverage. Don't be surprised!
Other common endorsements or additional coverage you may want to ask about are:
- Sewer backup and/or sump pump overflow
- Home-based business insurance
- Umbrella liability policies to extend your coverage limits
- Watercraft coverage to expand your liability and medical payment coverage and to protect small sailboats and outboard motorboats
- Difference in conditions coverage to protect your home against excluded risks such as earthquakes, floods, landslides and sinkholes
- Secondary residence premises coverage to protect a secondary residence, such as a summer home
Check with your agent or insurance company to see if additional coverages are available.
Other types of homeowner policies
Depending on your living conditions, you may want to talk to your agent or broker about these types of homeowner policies.
Farm or ranch policy
Coverage for a farm or ranch is similar to a homeowner policy, but it includes coverage for livestock and:
- It does provide actual cash value coverage, which is the cost to replace damaged or lost property with similar property, minus depreciation.
- You can buy replacement cost coverage for your farm dwelling, but you have to ask for it.
- You must insure crops under a separate policy.
Mobile homeowner insurance
This policy is written for mobile homes and covers the home and its contents. It also includes theft and liability protection.
What you should consider when shopping for homeowner insurance
First, make sure the company you're considering is licensed to do business in Washington state. You can also check to see how many complaints they have with our office.
Insurance companies look at many different factors to decide if they want to insure you and at what cost in premiums. They'll look into your previous insurance history to see if you qualify for coverage. After looking at your history, they may ultimately quote you a different premium than what they initially offered you. We recommend you do your research and shop around before you make a decision.
If you have questions about a company or types of coverage, we're here to help! Contact us to talk to an insurance expert.