If you own a house, you should have homeowners insurance. However, taking out this type of policy can be confusing for those who are new to property ownership. Use this guide to learn a bit more about this important form of protection so an insurance agent can answer your questions and outline all of your possible options.

A Guide to Homeowners Insurance

What does the policy cover?

Every policy is unique, but a standard plan covers the same factors whether you reside in a house or condominium. This includes the main structure of the property, all personal belongings inside the home, and any other building on the grounds—like a shed. 

It covers any new living expenses you incur if the home is undergoing repairs due to covered damage from a fire, lightning strike, or another incident. This might include the cost of food and temporary living quarters. It also offers personal liability protection and pays for legal fees if someone is injured on your property. The policy also helps if another person's belongings are damaged by your property, such as if a tree in your yard falls onto a neighbor's home. 

What are common exclusions?

The average policy doesn't cover water damage, such as flooding from a burst pipe or liquid backing up through drains. If you run a company out of your home, it does not protect any business property, such as computers or other necessary job-related equipment. It also doesn't cover pets or animal infestation destruction. If you'd like these factors included, you can secure specific riders, which are add-ons to a standard plan. 

What is an inventory?

Your agent will recommend that you take a complete inventory of everything in the home. This should include descriptions of expensive or hard-to-replace objects, as well as photographs of them and their estimated values. Always save receipts or appraisal paperwork. If an item is stolen or destroyed by a covered loss, this will ensure you are reimbursed.

What's the difference between replacement cost and actual cash value?

Replacement cost value (RCV) and actual cash value (ACV) are two options to consider when selecting a policy. The latter is more affordable but offers less protection. This plan only covers the depreciated value of the structure or any personal belongings; if you want to replace something, you will have to make up the difference. An RCV policy pays out the full cost of the item based on today's market—which may be more than it originally cost to purchase.

The team at Somers Agency will help you find the perfect homeowners insurance for your needs. This independent agency offers residents of Lorain County, OH, a broad selection of home insurance policies from the nation's top providers, so you can find the coverage you require at the best price. Visit their website to get started with an auto, home, or small business insurance quote, or call (440) 324-3447 to speak with a friendly agent about your options.