One of the worst risks you can take when shopping for homeowners insurance in DePere is not purchasing enough. In the event that a tornado or fire destroys your home, you want to know that you’ll have adequate coverage to take care of all the losses you’ll have endured.
Still, figuring out the exact amount of homeowners insurance you’ll need can be tricky. What really helps is knowing a few of the most commonly used terms in the homeowners insurance world. Below, we will go over these terms to help you get a better idea of how much homeowners insurance you should purchase.
Common Homeowners Insurance Terms You Should Know
Real Property
In legal terms, there are two types of property that someone can own. Basically, all things can be categorized under either term.
The first type is real property. This is property that can’t be moved. It generally includes land and permanent structures on that land. So, for example, the land that your home sits on is real property, but the house structure itself is also real property.
Personal Property
The second type of property is personal property. This property is moveable. It isn’t part of the land or affixed to land. Therefore, even though things like furniture, clothes, office equipment, electronics, etc. are inside your home (which is real property), all of these things are actually personal property because they can be moved.
It’s important to know the difference between real and personal property because different parts of your homeowner’s insurance policy will cover each type of property.
This leads us to our next term.
Coverage A
Coverage A is also known as dwelling coverage. This type of coverage covers most or all of the real property you own.
Therefore, we’re talking about coverage for your home’s structure most of all. This includes the actual dwelling of your home as well as flooring (such as wood, tile, or carpeting), walls and rooms, fireplaces, and some other structural elements.
Coverage A also covers any attached structures that share a foundation with your main dwelling. For example, if you have a garage attached to your home, this will be covered under coverage A.
On the other hand, separate structures on your land (such as barns or gazebos) are generally covered under coverage B, and personal property (like furniture and clothing) is generally covered under coverage C.
Replacement Cost
This is the most important valuation of your home to look at when deciding on coverage A (how much to insure your home for).
Your home’s replacement cost refers to how much it would cost to replace your entire home if it was destroyed by, for example, a fire.
Market Value
The market value of your home is how much it would sell for in a fair sale on the current market. Contrary to what you might think, you will rarely insure your home for its exact market value.
Endorsements (Riders)
Some homeowners will want to add, alter, or exclude certain elements of their homeowner’s insurance. Any time you do this, you will be using what’s called an endorsement or a rider, which will be attached to your insurance.
Some endorsements you may want to consider for your homeowner’s policy include:
- An Inflation Guard Endorsement
- An Extended Replacement Cost Endorsement
Do you have questions about choosing the right insurance amount for your homeowner’s policy? The agents at Brian Van De Hey Insurance are here to help.
We’ll run your numbers through our Replacement Cost Estimator to see how much your home would cost to replace; then we’ll go from there to come up with a smart Coverage A amount. Contact us today to learn more!
