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How to Shop for Homeowners Insurance

Your home is one of your largest investments, which is why it’s so important to make sure that you get homeowners insurance from the right company and purchase the proper amount of homeowners insurance coverage to help protect you financially if you face the unexpected.

Looking for a quick guide on buying homeowners insurance? Our home insurance checklist details key questions and information to gather, so when it comes time to build a policy with your agent, you’re in the know and confident that you’re getting the right level of coverage for your home.

Google Play Get to Know Your Home

Your policy is built specific to your home, so it’s important you know the features of your home to get the most accurate coverage. A good rule of thumb when purchasing homeowners insurance is to buy enough coverage to replace your home if it’s destroyed. The below information is used to determine an appropriate amount of protection you’ll need, as well as how much you’ll pay for it.

When shopping for homeowners insurance, having this information at your fingertips will help you save time when you meet with us — we’ll use this info to help design a policy that matches your needs:

✓ How many people live in your house full-time:

✓ Is your home your primary, seasonal or secondary residence:

✓ Year built:

✓ Square footage:

✓ Number of bathrooms:

✓ Number of stories:

✓ Detached structures like a shed & garage:

✓ Wood stoves, fireplaces (a.k.a. solid fuel appliances):

✓ Materials used for the roof (e.g. asphalt shingles, metal, slate):

✓ Materials used for the exterior walls (e.g. brick, stone):

✓ Do you run a small business from your home? (If so, you may need additional protection which you might not have considered.)

Google Play Get Confident in Your Homeowners Coverages

A standard homeowners policy has the following coverages available for purchase. When shopping for homeowners insurance and looking for a policy, it’s important to understand exactly how you’re protected:

Coverage A: Dwelling
Pays to rebuild or repair your home.

Dwelling coverage provides protection in the event your home and attached structures are damaged — including the home itself and all of its mechanical and electrical systems. Keep in mind, it’s in your best interest to buy enough dwelling coverage to cover the cost to rebuild your home.

Coverage B: Other Structures
Pays for damage to detached structures on your property, such as detached garages, gazebos, sheds and fences.

If you select other structures for your property, you’re covered for the same types of hazards that your home is covered for, such as damages from things like vandalism, fire, wind and hail.

Coverage C: Personal Property
Covers your personal belongings, including furniture, clothing and appliances, if they're stolen, damaged or destroyed.

Personal property coverage provides worldwide protection for your belongings (e.g. furniture, electronics, clothing, appliances, etc.). You can add higher levels of coverage when you schedule your more valuable assets, like jewelry or musical instruments.

Your personal property coverage comes with limits, and understanding those limits will help you determine if you need to itemize certain items. This means you can pick and choose items, typically higher-value belongings, and opt to have higher levels of coverage. Another benefit of itemizing your property is having “open peril” coverage, which gives you a broader range of coverage, such as accidental loss. Imagine losing your special diamond ring while out on the town with friends. Your standard policy wouldn’t cover the cost to replace your ring, but if you itemized your ring, you’d be able to replace your ring up to the limit listed on your policy.

Coverage D: Loss of Use (Additional Living Expense)
Pays for additional living expenses if your home is uninhabitable due to a covered loss.

If damage caused by a covered peril occurs to your home, you may need to temporarily relocate. In order to maintain your same standard of living, loss of use coverage helps pay for things like a hotel, food, transportation and other costs of living while repairs are being made.

Coverage E: Personal Liability
Protects you against financial loss if you're legally responsible for someone else’s injury or property damage.

Personal liability on your homeowners policy protects you against lawsuits by others alleging bodily injury or property damage.

Coverage F: Medical Expense
Covers medical payments to others for injuries caused by you or damages that happen on your property, regardless of your legal responsibility.

For instance, if your neighbor falls on your icy sidewalk and is injured, you might have to pay for costly hospital and medical bills. The medical expense coverage on your homeowners policy helps cover these costs.

It’s important to know that there are limits on your standard policy and you’re covered up to a certain amount. What if expenses go above your primary policy limits? You’d be responsible for paying the remaining costs out of pocket! That’s why having personal umbrella liability insurance is such a good idea — it’s an added layer of coverage over many types of your policies, including home and auto. This way, if you face a substantial claim or lawsuit, umbrella insurance will help pay the outstanding costs and you don’t have to dig into your life savings or sell off your hard-earned assets.

Take a look at our homeowners insurance overview page to learn more about your coverage options with American Family Insurance.

Google Play Create a Home Inventory

Homeowners insurance policies offer coverage for your personal property up to your coverage C limit. So before deciding how much personal property coverage you’ll need, it’s helpful to create a home inventory, which is a complete listing of items in your home. This way you’ll have the right amount of personal property coverage.

When you have a home inventory checklist, you know exactly what needs to be replaced in the event of a loss and it helps you provide a more accurate estimate of what all of your possessions are worth. Take a look at the items below and make note of any that are in your home. Of course, you’ll want to add to this list any items specific to your home!

Game Systems
Musical Equipment
Sound Systems
Sport Equipment

Your policy provides limited coverage (up to the amount listed) for the items below. Fill out this list to find out if you need additional coverage:

Coverage Limit
Your Asset's Value
Jewelry, Gemstones, Watches and Furs
Money, Banknotes, Coins
Stamps, Securities, Passports & Tickets
Business Property
Trading Cards & Comic Books
Watercraft including trailers and accessories
Flatware, Tableware
Rugs & Tapestries
Tools, Tool Boxes, Benches & Cabinets
Firearms & Related Accessories

Estimate Your Homeowners Insurance Cost

So how much does homeowners insurance cost? In short, it depends. Each home is unique, and there are a number of factors that influence the cost of your homeowners insurance. Here are a few things we consider when determining your homeowners premium:

What coverages do you have? Your standard homeowners policy is equipped with property and liability coverage. But a great thing about homeowners insurance is that you can customize your policy with optional coverages to match your needs. For instance, do you have a swimming pool? You might want to consider adding personal umbrella liability coverage for an added layer of protection. Additional coverage might mean a little higher premium, but the price you pay for protection is worth the cost considering what you might have to pay out of your own pocket if the unexpected happens.

How much would it cost to rebuild your home? The cost of your home insurance premium relates directly to the cost to rebuild your home and you’ll want enough coverage to rebuild if you face serious damages. A home which costs $300,000 to rebuild will usually have a higher premium than a home that cost $150,000 to rebuild because it’s more valuable.

How much are your possessions worth? Your personal property also plays a role in the cost of your home insurance because you’ll want enough coverage to replace everything if your home is damaged or destroyed. High-value items, like jewelry, art and collectibles, have limited coverage, so you have the option to increase those coverage limits and make sure you aren’t underinsured, as well as provide a broader range of protection for more types of hazards you might face — such as losing your wedding ring.

How new or old is your home? A newer home will have more reliable building systems (electrical, heating, plumbing), and they’re built to meet the standards of modern building codes. Also, building and construction methods have changed significantly over time. For example, a home built 100 years ago will likely be built with lath and plaster, which is more expensive than modern drywall to repair or replace. That’s why in many cases, insurance for a new home will cost less than the same amount of coverage on an older home.

Your personal claims history. A homeowner who has fewer claims will pay less for insurance than those who have more claims. It’s about your level of risk, and statistics show that people who have had claims in the past are more likely to have claims in the future.

Do you have pets? We love pets! Your home insurance policy provides some financial protection against liability claims and lawsuits brought by others for accidental bodily injury or damage to their property done by a pet. Your home insurance premium may be affected by the type and number of pets you have.

How is the fire protection in your area? How far are you from a water source and from a fire station? The further you are from either of these, the more your premium may be.

Understanding how your home insurance premium is calculated is important as you begin comparing rates for your insurance. Check out our homeowners insurance calculator to find out some optional coverages you might want to consider for your home.

Google Play Meet With an Insurance Agent

Now that you’ve assembled your essential information, it’s time to officially get covered! Set up time to meet with an insurance agent — they’ll use their expertise to help you build a customized policy with coverages unique to your needs. Our advice? Connect with an American Family agent to get the expert guidance you deserve.

Tips for Meeting with Your Insurance Agent

Ask about discounts. Looking for ways to save money on your homeowners insurance policy? You probably qualify for a number of homeowners discounts. Make sure to ask your agent about all the ways you’re eligible to save!

Know what kind of deductible you want. Your coverage will require you to pay a deductible before your insurance company steps in to cover the cost of a loss. Weigh the pros and cons of a high or low deductible, as this will affect your premium.

Ask questions. You want to be confident that your coverage is protecting you and your home — don’t be afraid to ask your agent questions. If you’re not sure what something means or if you don’t understand parts of your policy, your agent is the perfect person to ask.

Final Considerations to Look for When Shopping for Homeowners Insurance

Here are some questions you’ll want answers to when looking to purchase home insurance:

How much would it cost to rebuild your home? Typically, you’ll want to have enough coverage to rebuild your home, and that amount is not the same as the selling price of your home. Your agent can help you figure out how much it will cost to rebuild your home.

How much are all of your possessions worth? Use our home inventory to detail all the items you own, including the estimated cost of replacement if they were destroyed or stolen.

Do you have valuables such as expensive jewelry, furs, fine art, silverware, etc.? If so, be sure to make note and ask your agent about extra coverage that may be needed.

Do you want replacement cost coverage for your personal property? If your stove or refrigerator, for example, are damaged as a result of a covered loss, replacement cost coverage will pay for new items with comparable features and functionality.

Is your liability insurance enough to protect your assets? Make sure to take a good look at the liability coverage limit on your policy. Since liability insurance helps cover you against lawsuits for bodily injury or property damage that you, a household family member or a pet cause, you may want a higher amount than what’s on your policy today. Your agent can help you understand how much liability insurance coverage you need for peace of mind. You may want to consider an umbrella policy for an additional layer of protection.

Do you need additional peril coverage? Homeowner policies typically exclude damage from disasters like earthquakes and floods. If you live in areas that are commonly affected by these natural disasters, you may want to get a homeowners policy with added coverage to stay protected. In fact, some mortgage companies will even require you to have this insurance if you live in areas prone to these disasters. Either way, paying more for this coverage now could save you more out of your pocket in the long run.

Google Play Take Advantage of an Annual Review

As your dreams change and evolve, it’s important you’ve got the protection you need. At American Family Insurance, we want you to be confident and in control of your homeowners coverage — that’s why we recommend setting up an annual personal insurance review (PIR) to reassess your policy and confirm that your limits meet your needs. It doesn’t take long to check-in with your agent and the peace of mind an updated policy brings is invaluable.

Homeowners Insurance Terms Made Simple

When navigating the homeowners insurance buying process — we admit — you’ll run into some terms that are downright confusing. Don’t worry. We’ve got your back! Check out our homeowners insurance glossary to clear up any confusion. Then, head to our homeowners insurance coverage page to find out more about how you can properly safeguard your home from the unexpected.