8 Things Agents Wish You Knew About Homeowners Insurance

Many homeowners aren’t fully aware of what their homeowners insurance does – and doesn’t - cover, or how to get the most value from their policy. That is what insurance agents are for. Here are eight things your agent wishes you knew about homeowners insurance – it can make the difference between being underinsured and being protected. And make sure to reach out to Farm Bureau if you have questions about your homeowners policy. 

1. Homeowners Insurance Covers More Than Just Your House

You may be asking, what does my homeowners insurance cover other than my house? Homeowners insurance usually covers dwellings, belongings, liability and additional living expenses. However, with coverage, comes exclusions. 

2. Not Everything Is Covered

What doesn’t your homeowners insurance cover? Common exclusions include floods, earthquakes, sewer damage or maintenance issues. If your policy doesn’t include these, you may be able to add coverage or purchase another policy to make sure you’re covered. If you’re unsure what is excluded from your homeowners policy, it’s best to check with your local Farm Bureau agent.

3. The Difference Between Replacement Cost and Actual Cash Value Matters

When you see terms like Actual Cash Value (ACV) or Replacement Cost Value (RCV) listed in your policy, this is how insurance providers calculate the payout for damage to your home or to your belongings. When deciding on your coverage selections, you may be able to choose either ACV or RCV for your dwelling or household personal property. But what is ACV and RCV? ACV reflects the loss amount your home or belongings are worth now and accounts for depreciation, also known as the loss in market value.

RCV refers to how much it would cost today to replace or repair your property of similar kind and quality, regardless of depreciation. RCV can help you avoid financial gaps by restoring you back to the position you would have been in had the claim or loss not happened.

4. Your Personal Property Coverage Extends Beyond Your Home

In addition to covering your home, homeowners insurance also protects your belongings inside and outside of your home – which usually has a sublimit for items when off-premises. Your personal property coverage is designed to repair or replace your items that may be damaged by a covered loss, such as fire, windstorm or theft (e.g. luggage, wallets or gifts). But with personal property coverage, there are also limits on specific items such as jewelry, collectibles or furs. If you are unsure what is covered in your policy, connect with a Farm Bureau agent to make sure you have all your bases covered. 

5. Liability Protection May Be Your Most Valuable Coverage

Personal liability insurance typically covers bodily injury and property damage to others that you’re legally responsible for that occur on or off your property and may extend to incidents such as dog bites or non-auto accidents. Liability coverage also includes defense costs. Liability coverage also typically includes medical payments coverage to pay for medical expenses up to a set limit regardless of if you are legally responsible for the accident. Check your homeowner policy for the coverage limit for personal liability coverage. 

If a loss could reach above your personal liability limits, you may want to consider adding umbrella insurance. Umbrella insurance is an additional layer of protection for damages above your liability limits on your homeowners policy or your automobile policy and may cover you when there is an unexpected large accident or injury happens.  

6. Policy Limits Aren’t Always Enough

So, how much homeowners insurance do you need? It’s important to review your coverage amounts annually as a lot can happen in a year. You may need to factor in home improvements or increased building costs from the last year, which can affect your policy. 

7. Discounts and Bundling Can Save You Money

There are a few ways you may be able to save when it comes to your homeowners policy. Common discounts include bundling your home and auto, adding a security alarm, which could give you a discount on your premium, or having a claim-free history.

8. Regular Reviews With Your Agent Prevents Gaps

Life happens. Remodeling, new valuables or family changes may affect your homeowners coverage. It’s important to check in with your agent annually to make sure you’re covered where you need to be and to prevent anything from slipping through the cracks. 

Protect Your Home and Everything in It

Talk to your local Farm Bureau agent today to review your coverage and make sure you’re protected from the unexpected.