Home Insurance Options

As a homeowner, you need to make sure you have enough insurance coverage to handle an emergency situation. If there is a fire, a bad storm, or someone breaks in and steals a couple of antiques, you would have to pay out of your own pocket to repair or replace whatever was lost or damaged. With homeowners insurance, all you have to pay is the deductible and the rest will be taken care of. However, you need to make sure you have the right kind of coverage. Following are a few tips on understanding your homeowners’ insurance options.

Actual Cash Value

This is an insurance term that means anything that is stolen or damaged is covered for the amount of money that it is actually worth at the time. For instance, if you install new shingles and they have been in place for a few years, they will diminish in value. If the shingles are damaged in a storm, you will only receive a small portion of the original purchase price, less whatever deductible you carry.

Replacement Cost

With this type of coverage, you will be able to collect a check from the insurance company for 80% or more of whatever it will cost to replace an item that becomes damaged. You would be able to replace those same shingles that were damaged with similar shingles, with the only moderate out-of-pocket expense.

Guaranteed Replacement Cost

With guaranteed replacement cost coverage, you would receive 100% of the cost to replace an item that is damaged or stolen. In this case, you will be able to buy new shingles to replace the damaged ones without any cost to you–minus the deductible, of course.

Structures Other than Dwelling

This clause in your homeowners’ insurance policy covers anything that isn’t actually attached to your homes, such as a shed, or a fence. It may also include sidewalks, gazebos, or benches in your garden.

Liability Coverage

This is an important item in your insurance policy. If someone is hurt while on your property, the liability insurance will protect you by paying for their reasonable medical care. The extent of care will be covered within the terms of the policy. This coverage includes slip-and-fall protection or medical care for someone who is bitten by your pet, or is otherwise injured–the coverage could extend to financial protection for you or a family member if they cause injury to someone else even if they’re not on your property at the time.


An umbrella policy is something that homeowners take out to provide extra coverage over and above what liability insurance usually covers. Because the cost of medical care continues to rise, and lawyer’s fees, as well, the extra coverage provided by an umbrella policy may be beneficial.

Personal Property Value

Your home insurance policy will also include a clause for personal property. In most cases, you will be required to itemize this property in case anything becomes damaged or stolen. Valuable items, such as jewelry and antiques, or a costly collection, such as NASCAR items or a doll collection, should be included. These items will need to be appraised in order to prove their worth. Each item should be photographed or videotaped in order to prove you actually owned them. Usually, coverage of this type doesn’t cover replacement cost unless you pay extra for it.


A rider is actually a separate policy that goes along with your regular home owner’s policy in order to make sure you have adequate coverage for specialized items. Some of your personal property may require a rider, such as valuable antiques or jewelry.

Declarations’ Page

A declaration’s page is an annual statement from the insurance company outlining what your policy covers, and what the policy costs. You should look this over carefully to make sure you aren’t carrying insurance coverage on items you no longer own, and to ensure that everything you want to be covered is listed on the policy. You should keep the declarations’ page in a safe place, along with your policy.

Loss of Use

Loss of use coverage will make sure that you and your family will be able to maintain some semblance of normalcy in the event your home is damaged by fire or a natural disaster, such as a tornado or a lightning strike. You will receive enough money to rent another home or a motel until such time as your home is ready to live in again.