Coverage Guide
Home Insurance: What to Look For & Questions to Ask
Most homeowners discover the gaps in their policy after a storm, a burst pipe, or a kitchen fire. Here's how to ensure you are getting the coverage you actually need.
What to look for in a policy
The coverages that separate a real homeowners policy from a thin one. None of them are about premium alone.
Dwelling coverage at full replacement cost
This pays to rebuild your home. Make sure the limit reflects current local construction costs — not market value or your purchase price. Ask for a replacement cost estimator, not a guess.
Extended or guaranteed replacement cost
Construction costs spike after wildfires, hurricanes, and supply shocks. Extended replacement (typically 25–50% over your dwelling limit) protects you when rebuild costs run over.
Personal property limits and how they're valued
Confirm whether contents are paid at actual cash value (depreciated) or replacement cost. Replacement cost is almost always worth the small premium bump.
Personal liability — at least $300K, ideally $500K+
Covers you if someone is injured on your property or you cause damage off-premises. Pair it with an umbrella policy if you have meaningful assets.
Water backup and sewer/sump endorsement
Standard policies exclude water backing up through drains, sewers, or a failed sump pump. Add this endorsement — claims here are common and not cheap.
Named peril vs. open peril (HO-3 vs. HO-5)
HO-3 covers your home on open peril but contents only on named perils. HO-5 covers both on open peril — broader protection, usually a small price difference. Ask which form you're being quoted.
What's excluded — flood, earthquake, mold, sinkhole
These are almost never in a standard policy. If you're in a flood, quake, or sinkhole zone, you need separate coverage (NFIP, private flood, or a quake endorsement).
Loss of use / additional living expenses
If your home is uninhabitable after a covered loss, this pays for hotel, food, and storage. Confirm both the dollar limit and the time limit (12, 24, 36 months).
Deductibles — including a separate wind/hail or hurricane deductible
Many policies have a percentage deductible (1–5% of dwelling) for wind, hail, or named storms. On a $500K home, that's a $5K–$25K out-of-pocket hit. Know it before you sign.
Carrier financial strength and claims reputation
Catastrophe seasons reveal which carriers actually pay. Check AM Best ratings, J.D. Power home claims scores, and your state DOI complaint index before choosing on price.
Discounts you actually qualify for
Multi-policy (bundle with auto), new roof, monitored alarm, impact-resistant roof, smart-home devices, claim-free history. Make sure each one shows on your quote.
Scheduled personal property for high-value items
Jewelry, art, firearms, collectibles, and bikes have sub-limits in standard policies. Schedule them individually for full coverage with no deductible.
Ask these before you bind
Bring this list to any agent, carrier rep, or comparison tool. The answers tell you whether you're being sold a policy or actually advised on one.
- 1
What's the replacement cost estimate for my home, and how was it calculated?
- 2
Is this an HO-3 or HO-5 policy, and what's the practical difference for my contents?
- 3
Do I have extended or guaranteed replacement cost? By what percentage over my dwelling limit?
- 4
What's my wind/hail or hurricane deductible, and is it a flat dollar amount or a percentage?
- 5
Is water backup / sump pump failure covered, or do I need an endorsement?
- 6
What perils are excluded — and which ones realistically apply to my zip code?
- 7
How much personal liability coverage do I have, and would an umbrella policy make sense?
- 8
Are my contents covered at actual cash value or replacement cost?
- 9
What's the limit on loss of use / additional living expenses, and for how long?
- 10
Are high-value items (jewelry, art, firearms, bikes) covered, or do I need to schedule them?
- 11
What discounts am I getting, and what would I qualify for if I added an alarm or new roof?
- 12
How does this carrier rank for claims handling — AM Best rating, J.D. Power, state DOI complaints?
Not sure which of these apply to you?
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