1. Homeowners insurance typically covers four main categories
A standard homeowners policy provides protection for: 1) your dwelling (the structure of the home); 2) detached units (like a shed or detached garage); 3) personal property (your belongings); and 4) living expenses if you’re displaced.
2. You may have a hurricane deductible, and it can be pricey
You may not realize it, but insurers in coastal states include separate deductibles for hurricanes in their standard homeowners policies, usually on the front of the policy and on the declarations page.
3. You must purchase flood insurance separately
Some homeowners may be surprised to learn that flooding — even from a hurricane — is generally not covered by a standard homeowner’s insurance policy. If you live in a federal flood zone and you have a mortgage, you likely had to purchase flood insurance through the National Flood Insurance Program, or NFIP, when you bought your home.
4. Pay close attention to what’s excluded from your policy
Reading and understanding your policy’s exclusions page is key.
5. Your current coverage may not be enough
It’s possible your insurance won’t cover the full amount of your loss and you need to increase the amount. This depends on whether your policy uses actual cash value (ACV) or replacement cost value (RCV) to pay out claims. RCV policies ensure you’ll receive the full amount of money needed to replace covered damages with materials similar in quality to what you had. You’ll typically pay a higher deductible for an RCV policy, but the enhanced protection offers more peace of mind if your home or property are destroyed.
6. Regular documentation can help streamline the claims process
Take photos and video of the interior and exterior of your home routinely (every six months to a year) to document what your home looks like and what’s in it. If you’ve done major renovations or repairs, make an inventory of that, too, and upload all of the documentation to the cloud so you can access it remotely.
7. Renters and condo owners typically need special coverage
If you live in an apartment, your landlord insures the building, but you need to carry insurance for your possessions, or renters insurance.
If you own a condo, find out what areas are covered by the association and what you’ll need to insure. In addition to your personal items, it’s possible that you need to insure a portion of the structure. Check with your association attorney or property management company before you buy and find out exactly what type of policy you’ll need.