Typical homeowners insurance covers your dwelling, medical payments to others, other structures and contents, the house, its contents, additional living expenses, loss of use (due to fire), personal liability claims against the policyholder and other members of the household and may cover against losses such as:
  • Explosion
  • Riot or civil commotion
  • Theft
  • Fire or lightning
  • Windstorm or hail
  • Breakage of glass
  • Aircraft
  • Earthquake coverage (In some cases)
  • Vehicles
  • Smoke
  • Building code upgrades
  • Vandalism and malicious mischief
When you purchase homeowners insurance:
  • Read your homeowners insurance policy and your renewal declarations carefully because anything promised verbally or representations not documented in writing can be difficult to prove.
  • Compare prices, features, and reputation
  • Don’t ask for "the best coverage." Compare coverages on your own to determine the best product for you.
  • Because each company’s loss experience differs, the rates will also.
  • Be carefule your dwelling is not insured for amounts inadequate for rebuilding (inadequate insurance-to-value).
  • Your dwelling limit should be the amount it would cost to replace your home, determined by the cost of the materials and labor involved in rebuilding your home.
  • Don't insure your home for the purchase price or the current market value.
  • Ask if building upgrade/code changes is included in your homeowners insurance coverage.
  • When setting your contents coverage, be sure to take into account everyday items like books, clothing, and appliances, etc.
  • Actual cash value, is the fair market value of your home (not nessasarily the relacement cost)
  • A policy cannot be sold as a "guaranteed replacement cost" policy unless it will pay to completely rebuild the home.
  • Some types of replacement cost policies will pay your policy limits, plus a certain percentage above those limits.
  • Without building code upgrade (ordinance or law) coverage, your insurance company may not pay for changes you may need to make to the structure of your home to bring it up to current building codes.
  • Ask your agent if limits are automatically reviewed or increased.
  • When you get a new policy, don’t file it without checking to see that the coverages, limits, premium, and other information is correct.
  • Keep an inventory of personal property (belongings, furniture, etc.), the dates purchased, and the price.
  • Take pictures of important and valuable items for your homeowners insurance policy.
Discounts available on homeowners insurance:
  • Burglar alarms
  • Fire protection devices (smoke detectors, alarms, and sprinklers).
  • Multi Policy if you already have an auto insurance policy with the company.
Possible exclusions in your homeowners insurance contract:
  • Earthquake
  • Flood
  • Mold
  • Earth movement
  • Wear and tear
  • Loss of personal property by tenants
Glossary of Homeowners Insurance Terms:
  • Actual Cash Value (ACV) - Unless otherwise defined in the policy, actual cash value in California means fair market value. The fair market value of an item is the dollar amount that a knowledgeable buyer (under no unusual pressure) is willing to pay, and a knowledgeable seller (under no unusual pressure) is willing to accept.
  • Agent - A licensed individual or organization authorized to sell and service insurance policies for an insurance company.
  • Binder - A short-term agreement that provides temporary insurance coverage until the policy can be issued or delivered.
  • Broker - A licensed individual or organization who transacts insurance on your behalf.
  • Claim - Notice to an insurance company that a loss has occurred that may be covered under the terms and conditions of the policy.
  • Declarations - Usually the first page of an insurance policy that contains the full legal name of your insurance company, your name and address, the policy number, effective and expiration dates, premium payable, the limits of insurance, covered property, deductibles, and any applicable lienholder information.
  • Deductible - The amount of loss that the policyholder is responsible to pay up-front before covered benefits from the insurance company are payable.
  • Depreciation - A decrease in value due to age, wear and tear, or obsolescence.
  • Endorsement - A written agreement that changes the terms of an insurance policy by adding or subtracting coverage.
  • Exclusion - A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property, or locations.
  • Insured - The policyholder who is entitled to covered benefits in case of an accident or loss.
  • Insurer - The insurance company that issues the insurance policy, and agrees to pay for losses and provide covered benefits.
  • Premium - The price of insurance paid to the insurance company for a policy.
  • Quote - An estimate of the cost of insurance based on information supplied to the agent, broker or insurance company.
  • Replacement Cost - The amount that it costs to replace lost or damaged property with new property of like kind and quality in the local market.


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