Home Insurance FAQs

Does the size, caliber, and efficiency record of my local fire department have any impact on my homeowners insurance policy?


It can. The National Insurance Services Office (ISO) ranks each local fire department on the quality and potential effectiveness of their firefighting capabilities. The ISO ranking is formally known as the Public Protection Class (PPC). The PPC uses a scale of 1 (highest ranking) to 10 (lowest ranking) to rate each facility.


Home insurance providers commonly use the PPC score in conjunction with a home’s distance from the nearest responding Fire Station to determine policy rates. Some providers might even decline coverage based on the PPC score and related factors.


How much would it cost to rebuild my home?


The answer to this question will determine how much insurance coverage you require. The following questions will help you estimate rebuilding costs:


  • What are the rates charged by local contractors?
  • How many square feet is your home?
  • How many bathrooms do you have?
  • How many other rooms do you have?
  • Is your home’s exterior built of brick, stone, veneer, or frame?
  • What type of roof does your home have?
  • How many floors is your home?
  • What special features does your home have (e.g., attached garage, fireplace, arched windows, etc.)?
  • What is the quality level of your home’s materials and finishes?


How often do I need to estimate my home’s value to keep my coverage amounts appropriate?


We recommend estimating your home’s value each year.


What are some tips for estimating my home’s coverage value?


  • Know local building codes – These change with varying frequency from community to community. If an unforeseen event requires you need to rebuild, you’ll want to make sure you rebuild everything in compliance with local code. Failure to do so could be extremely costly.


  • Don’t insure at market value – Rebuilding costs could significantly exceed your home’s market value or the amount you paid for it (they could also fall below these values).


  • Have sufficient coverage for your mortgage and for rebuilding – Your lender may only require you to cover the mortgage amount. However, you should also consider the cost of rebuilding when deciding on coverage amounts.


  • If you enhance your home’s value, increase your policy limits – If you add a room, upgrade your flooring, upgrade your roof, or make any other change to your home that significantly increases its value, it’s imperative to also increase your coverage amounts.


What are my options for insuring and replacing the personal items and other contents inside my house?


  • Full replacement coverage – This kind of coverage reimburses you the full amount required to replace your property, regardless of age or depreciation.


  • Actual cash value coverage – This type of coverage subtracts the amount of depreciation from the replacement cost of new items.


What is a deductible?


A deductible is a dollar amount you’re responsible for paying in the event of a covered claim. Deductibles are agreed upon in the terms of the policy on the Declarations Page. After you file a covered claim, you’re obligated to pay the portion that’s up to the amount of the deductible. For example, if your claim is worth $3,600 and your deductible is $500, insurance will pay $3,100 of the claim. You pay $500. If the covered loss was valued at $475, you would be responsible for the full amount, with no insurance payment.


Deductible payments do not accumulate across multiple claims. For example, if you file a claim in January, you would owe the $500 deductible. If you filed another claim in March, you would again be responsible for $500. In the $475 example above, your payment of the full claim has no impact on the deductible you’ll owe on your next claim: $500.


Are there different types of deductible options available for homeowner policies?


Yes. The three most common deductible types for homeowner’s policies are:


  • Flat – A flat deductible is a set dollar amount owed for each covered claim. The $500 example above is a flat deductible.


  • Percent – With this type of deductible, the policyholder selects a percentage of the house’s dwelling coverage to pay as the deductible. For example, if you have $200,000 in dwelling coverage and a 2.5% deductible, you’d owe $5,000 for each covered claim.


  • Split – A split deductible uses a combination of percent and flat deductibles depending on the loss type. For instance, the policy might specify that, in the event of a wind and hail-damage claim, a percent deductible will apply. For all other loss types, a flat deductible might apply.


How does the deductible amount I choose affect my rates?


Generally speaking, the higher your deductible amount, the less you pay in premium. The lower the deductible amount, the more you pay in premium. It’s important to select a deductible amount you reasonably believe you can pay. Keep in mind, too, that if you have more than one claim in a short period of time, you’ll have to pay that deductible amount for each separate claim.


Does my homeowners insurance policy include any liability coverage?


Yes. A certain amount of liability coverage is automatically built into most homeowners insurance policies. Homeowner’s liability shields you against loss and or injury to other people you are legally ordered to pay. If your dog bit your neighbor, for example, your liability coverage would cover the cost of medical expenses, any lost wages arising from missed work time, etc. Your liability coverage would also help cover your legal fees in the event you’re sued for a claim against you.


What happens if my liability coverage isn’t enough to cover a claim against me?


It’s not inconceivable that the liability portion of your homeowners insurance could hit its payout limits in the event of a serious claim against you. This is especially true if you were sued by someone claiming you caused their loss or injury. If you lost the suit, the award could easily exceed the payout limits of your normal homeowner’s policy, potentially devastating your finances.


This is when a Personal Umbrella Insurance Policy would be extremely useful. Personal Umbrella Insurance supplements your existing homeowners insurance and begins paying when you reach the payout limits on the standard policy.


Does my homeowners insurance policy provide any coverage for my jewelry?


Standard homeowner’s policies provide only limited coverage for jewelry and other personal belongings. This is why you might want to invest in jewelry coverage and/or a Personal Articles Floater.


Should I take photos of my stuff and make an inventory of it?


Yes. Taking an inventory, including photographs, is always a good idea. In the event of a covered claim, you’ll be able to more effectively catalogue and estimate your losses. Some providers even offer forms to make the process of inventorying your stuff easier. Talk to your provider about it.


If a covered loss forces me out of my home during repairs/reconstruction, will I be reimbursed for those additional living expenses?


You’ll need to purchase the appropriate coverages to receive this kind of reimbursement. Such coverage will reimburse you for housing, food and other expenses within the limits established by the policy.


Why loss types does my homeowners insurance cover?


Standard homeowner’s policies typically cover losses arising from:

  • Fire
  • Lightning
  • Tornadoes
  • Wind storms
  • Hail
  • Explosions
  • Smoke
  • Vandalism
  • Theft


What types of losses aren’t covered by a standard homeowners insurance?


Generally speaking, the following types of events aren’t covered by standard homeowner’s policies and require separate policies:


  • Earthquakes
  • Flooding
  • Nuclear accidents
  • Warfare


A busted pipe has flooded my floors. Does my homeowners insurance cover this?


Yes. Most homeowner’s policies will cover this kind of event.


When should I increase my homeowners policy coverage amounts?


If you add rooms to your home or other additions, or make a significant purchase (e.g., jewelry, computer equipment, etc.), it’s a good idea to review your policy and consider modifying your coverages.


What steps can I take to lower my homeowners insurance rates?


There are a number of measures you can take to lower your premiums:


  • Install window locks and deadbolt door locks.


  • Install an alarm system, including outside coverage, that connects directly to your local police department.


  • Install smoke detectors and keep them properly maintained and functional.


  • Install inside fire-suppression sprinklers.


  • Install a fire alarm that sends an alert directly to your responding firehouse.


  • Stop smoking.


  • Bundle your homeowners insurance with other policies (e.g., auto) from the same provider.


How and why does my prior-claims history factor into my homeowners insurance premiums?


You might have heard the old saying that “past is prelude to future.” In the insurance business, this axiom is taken seriously. Statistics show that your history of loss claims is a strong predictor of your future loss claims. This is why your claims history is taken into account when a provider calculates your premiums. Your claims history can also be used to deny coverage entirely.


What can I do if my homeowners insurance application is denied or my rates are higher than I anticipated due to prior losses?


In the event you’re denied coverage, or your rates are negatively impacted by your claims history, the Federal Fair Reporting Act (FCRA) obligates the provider to send you an FCRA notice. This notice will include information for contacting the consumer reporting agency that gave the provider your claims history information. You can then contact that agency to verify the information in your report and correct any mistakes.