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 your belongings are paid at what they're worth today after wear and tear (the industry calls this actual cash value) or at what it would cost to buy new replacements. Replacement cost is almost always worth the small extra cost.
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 coverage (add-on)
Standard policies exclude water backing up through drains, sewers, or a failed sump pump. Add this coverage — claims here are common and not cheap.
What's covered and what isn't — two kinds of policies
Most homeowners policies (called HO-3 in the industry) cover the house itself against almost anything unless it's specifically excluded — but they only cover your belongings against a specific list of events like fire, theft, and storms. A broader policy (called HO-5) covers both your house and your belongings against almost anything unless excluded. The difference in price is usually small — ask which one 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 (the federal flood program, a private flood policy, or a separate earthquake add-on).
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 the carrier's financial strength rating, customer satisfaction scores, and complaint records filed with your state's insurance department before choosing on price alone.
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
Standard policies cap what they'll pay for jewelry, art, firearms, collectibles, and bikes — often far below what those items are worth. You can add individual items to your policy at their full value (the industry calls this scheduling them) so they're covered 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?
Ask Sage - 2
Does this policy cover my belongings against everything, or only against a specific list of events? (Your agent may call these HO-3 and HO-5 — ask which one you're being quoted.)
Ask Sage - 3
Do I have extended or guaranteed replacement cost? By what percentage over my dwelling limit?
Ask Sage - 4
What's my wind/hail or hurricane deductible, and is it a flat dollar amount or a percentage?
Ask Sage - 5
Is water backup / sump pump failure covered, or do I need to add that coverage?
Ask Sage - 6
What perils are excluded — and which ones realistically apply to my zip code?
Ask Sage - 7
How much personal liability coverage do I have, and would an umbrella policy make sense?
Ask Sage - 8
Are my contents covered at actual cash value or replacement cost?
Ask Sage - 9
What's the limit on loss of use / additional living expenses, and for how long?
Ask Sage - 10
Are high-value items (jewelry, art, firearms, bikes) covered, or do I need to schedule them?
Ask Sage - 11
What discounts am I getting, and what would I qualify for if I added an alarm or new roof?
Ask Sage - 12
How does this carrier rank for actually paying claims? What are their financial strength rating, customer satisfaction scores, and complaint records with the state insurance department?
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Not sure which of these apply to you?
Ask Sage AI. Describe your situation and what you're trying to protect — get a plain-spoken answer with no sales pitch.
Ask Sage AIRelated coverage guides
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