A Practical Guide for Everyday Homeowners

Step 1: Understand What Homeowners Insurance Really Covers

Before comparing prices, you need to know what you’re actually buying. A standard homeowners policy is made up of several building blocks.

Core Coverages in a Typical Homeowners Policy

Most policies include these main sections:

1. Dwelling (Coverage A)
   • Protects the structure of your home: walls, roof, floors, built-in cabinets, etc.
   • This is generally based on the cost to rebuild, not the market value of the home.
2. Other Structures (Coverage B)
   • Covers structures on your property that aren’t attached to the main house:
     • Detached garage
     • Shed / workshop
     • Fence, gazebo, etc.
   • Typically a percentage of your dwelling limit (e.g., 10% of Coverage A).
3. Personal Property (Coverage C)
   • Your belongings: furniture, clothing, electronics, décor, small appliances, sporting goods, etc.
   • Often set as a percentage of your dwelling coverage (e.g., 50–70%).
   • Some items (jewelry, firearms, collectibles) have special sub-limits unless you buy extra coverage.
4. Loss of Use / Additional Living Expenses (Coverage D)
   • Pays extra costs if your home is uninhabitable after a covered loss:
     • Hotel or rental home
     • Extra food costs (eating out vs cooking at home)
     • Laundry, transportation, and other necessary expenses
   • The goal is to keep your lifestyle reasonably similar while repairs are underway.
5. Personal Liability (Coverage E)
   • Protects you if you’re legally responsible for:
     • Someone getting hurt on your property, or
     • Causing damage to someone else’s property
   • Can cover legal defense costs, settlements, and judgments (up to your limits).
6. Medical Payments to Others (Coverage F)
   • Small, no-fault coverage that pays for minor injuries to guests, regardless of who was at fault
   • Think: urgent care co-pay if a visitor trips on your steps.
7. Optional Building Code / Ordinance Coverage
   • After a loss, you might be required to rebuild parts of your home to current code, not just “how it was.”
   • This endorsement helps cover the extra cost of those upgrades.

Step 2: Decide How You Want to Be Paid After a Loss

How your policy reimburses you makes a huge difference in what you actually receive.

1. Actual Cash Value (ACV)
   • Pays the depreciated value of what was damaged.
   • Old items = less money.
   • Example:
     • You bought a TV 8 years ago for $1,000.
     • With ACV, you might receive $150–$200 based on its current value, not enough to buy a similar new TV.
2. Replacement Cost Value (RCV)
   • Pays what it would cost today to repair or replace with a similar new item.
   • You replace “old with new” without deduction for age (subject to policy language).
   • Usually more expensive in premium than ACV—but much better in a real claim.
3. Extended or Guaranteed Replacement Cost (for the Dwelling)

   In areas with rising construction costs or high-value finishes, standard limits may not be enough.

   • Extended Replacement Cost
     • Adds an extra cushion above your dwelling limit (e.g., 20–50% more) if rebuild costs exceed the original limit.
   • Guaranteed Replacement Cost
     • In some policies, the company agrees to pay whatever it costs to rebuild your home to its previous condition, even if it exceeds your stated limit (subject to conditions).

   If your home is newer, custom-built, or in an area where construction costs spike after storms, these options are worth serious consideration.

Step 3: Figure Out How Much Coverage You Actually Need

Guessing is not a strategy. You want enough coverage to rebuild and refurnish your life without overpaying.

Step 4: Choose a Deductible That Fits Your Cash Flow

Your deductible is the amount you pay out of pocket before insurance kicks in.

Step 5: Compare Quotes the Right Way (Apples to Apples)

Shopping for homeowners' insurance is not just about “Who’s cheapest?”

Here’s how to compare properly:

1. Get at Least 3 Quotes

   Make sure each quote is built with:

   • The same dwelling limit
   • Similar personal property limits
   • The same deductible(s)
   • The same reimbursement type (ACV vs replacement cost)
   • Equivalent endorsements (water backup, scheduled jewelry, etc.)

   If one policy is cheaper but missing critical coverage, it’s not a fair comparison.

2. Look Beyond Price

   Consider:

   • Claims reputation and speed
   • Customer service / responsiveness
   • Financial strength of the company
   • How they treat long-term customers (discounts, rate stability)
3. Take Advantage of Discounts

   Ask about:

   • Bundle discounts (home + auto, umbrella, etc.)
   • Protective devices: monitored alarms, smoke/CO detectors, water shut-off systems, smart sensors
   • New roof or roof upgrades
   • Claims-free history
   • Paperless or auto-pay options

   Just as important:

   Understand that your claims history and credit profile can influence your premium in many states.

Step 6: Decide Which Extra Coverages (Endorsements) You Actually Need

Standard policies have gaps. Endorsements (riders) help you fill them based on your lifestyle.

Common options to consider:

1. Extra Coverage for High-Value Items

   If you own:

   • Engagement rings or fine jewelry
   • Art, collectibles, or rare items
   • High-end photography or music equipment

   You may need scheduled personal property coverage to raise limits and broaden protection.

2. Water Backup Coverage

   Protects against damage from:

   • Sewer backups
   • Drain backups
   • Sump pump failures

   Standard policies usually exclude this, but it can cause thousands of dollars in damage.

3. Ordinance or Law (Building Code) Coverage

   Helps with extra costs when repairs must bring your home up to current building codes after a loss, not just “how it was.”

4. Home-Based Business Coverage

   If you:

   • Run a small business from home
   • Store inventory or use expensive equipment in the home

   You may need higher limits for business property and possibly home business liability.

5. Pet-Related Property Damage Coverage

   Some policies exclude damage caused by pets. If you know your furry friends are… enthusiastic, it might be worth exploring coverage options.

6. Identity Theft Restoration

   Covers certain expenses associated with identity theft: legal fees, lost wages, mailing costs, etc.

7. Landscaping Coverage

   Helps replace trees, shrubs, and landscaping features that may not be fully covered under standard limits.

Step 7: Know When You Need a Separate Policy

Some risks are too big to be simply added as a small endorsement.

You may need separate policies for:

• Flood insurance
  • Standard home insurance does not cover flood damage (water coming from outside).
  • Flooding has become more unpredictable even in areas with no prior history.
• Earthquake insurance
  • Can be separate or added as a special endorsement depending on the state and insurer.
• Landlord insurance
  • If you rent your home regularly (not just occasionally), you may need landlord coverage for both property and liability related to tenants.

Step 8: Consider Working with an Independent Agency (Like ProGen Insurance)

You can shop for insurance completely on your own. But it’s easy to miss gaps or overpay for coverage you don’t need.

Working with an independent insurance professional adds value because:

• We can compare multiple insurance companies, not just one brand.
• We understand underwriting differences (what one company likes, another might avoid).
• We help you coordinate home, auto, umbrella, life, and business coverage as a complete plan.
• We stay with you long-term to adjust coverage as your life changes.

At ProGen Insurance, we focus on:

• Matching coverage to your actual risk profile
• Finding discounts without sacrificing protection
• Explaining your options in clear, simple language
• Helping you before, during, and after a claim