• Exclusions to coverage. For example, most insurance policies do not cover flood damage as a standard item. Those types of coverage are generally bought separately.
  • Dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
  • Replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
  • Actual cash value of your home. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.
  • The liability amount. Generally your homeowner’s insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

I have worked for years with most of the local insurance companies and can assist you with information on home owners insurance and can assist you in what to look for when shopping for home owners insurance.  The one special type of insurance that can become very important in real estate transactions is flood insurance as a fair amount of the homes in our area are in flood zones.