What You Should Know About Homeowners Insurance

Homeowners insurance is a highly competitive market. Many factors affect your rate, including neighborhood crime rates, building materials, and the number of recent claims filed.

A general rule is to get coverage equal to your home’s replacement cost, which is generally more than its market value. Your¬†Home Insurance Arkansas¬†agent can help you calculate this figure.

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Home insurance protects your house and property against several risks or perils. Each policy differs in terms of which perils are covered and the amount of coverage provided. Depending on the type of policy, it may also provide personal liability protection for accidents that occur at the house and other structures on the property and even some injuries that happen away from the home.

The first page of a home insurance policy has a summary of the policy, including the coverages, dollar limits, and deductibles. It is important to understand this information, so you can make an informed decision when purchasing a home policy.

Most policies offer two types of coverage: replacement cost or actual cash value (ACV). ACV covers your house and other structures at a lower level, but it does not always cover the full amount that it would cost to replace them. To ensure that you have sufficient coverage, many policies require that you insure your dwelling for at least 80% of its replacement cost. Some policies also require that you insure other structures for a certain percentage of the dwelling coverage limit.

Dwelling coverage protects the structure of your house and built-in appliances. Other structures coverage is for other buildings on your property, such as a shed, detached garage, or fence. Generally, these structures are covered at a level of 50% of your dwelling coverage limit. However, some companies allow you to increase this amount up to 100% of the dwelling limit.

Personal belongings coverage ensures your possessions against damage or theft. This includes furniture, clothing, and appliances inside your home, as well as items that you keep in a shed or a garage. Some companies add an extra layer of security by requiring that you have a monitored burglar alarm or other protection system to receive this coverage.

Liability coverage in a home insurance policy pays for medical bills, lost wages, and other costs if someone is hurt on your property. It also protects you if you are held responsible for damage or injury caused by pets or anyone living on the property, such as a tenant or a friend visiting for the weekend. This portion of the policy is limited, and if you want more coverage, you may need to purchase an umbrella liability policy.


A homeowners insurance deductible is the amount of money you agree to pay toward a home insurance claim before your insurer starts picking up the tab. It’s a form of shared risk, and the higher your deductible, the lower your premium will be. Whether to opt for a higher or lower deductible comes down to how much you can afford in the long term and how often you plan to file claims.

Deductibles can be set as either a fixed dollar amount, usually in the range of $500 to $2,000, or a percentage of your policy’s coverage limit. Insurers usually offer a choice of either type, and you can change your deductible at any time.

In most cases, the insurance company will reimburse contractors for damage to your home minus the amount you paid toward the deductible, but this varies from one company to the next. Some will have you pay your deductible directly to the contractor working on your home, while others may require you to hand over your deductible receipt as proof that you’ve paid it.

As you shop, remember that a high deductible means lower homeowners insurance rates, but also that you’ll be on the hook for more out-of-pocket expenses in the event of a claim. The key is to find the right balance for your financial situation and needs, with a homeowners insurance deductible you can comfortably afford in the long run.

In some cases, you might see savings for a high homeowners insurance deductible that would be attractive to your budget if you live paycheck to paycheck, but these savings can quickly disappear if you file multiple claims in a short period. In addition, insurance companies might raise your premium at renewal after a claim, which can make the financial decision to go with a higher deductible more difficult. In this case, getting quotes with different deductible options might help you find the best balance for your budget and risk tolerance.


Homeowner insurance policies differ from one company to another, but most offer similar types of coverage. The Special Form (HO-3) is the most popular homeowners policy and offers the broadest coverage, covering all perils unless they are specifically excluded. Some insurers may add additional coverage for an extra cost through an Ordinance or Law endorsement that pays to rebuild your home to comply with current building codes or local laws that were not in effect when your house was built.


Homeowners insurance policies generally cover destruction and damage to your residence and personal property, as well as your liability for harm to others. There are three basic levels of coverage: actual cash value, replacement cost, and extended replacement cost. Most insurers recommend you buy enough coverage to cover the labor and materials necessary to completely rebuild your dwelling, without a depreciation deduction. Your producer can help you determine this amount. In addition, you may want to add special endorsements for high-value items like jewelry and antiques, as well as a flood or earthquake policy.

The most important thing to remember when shopping for a policy is that the premium you pay is based on the risk your insurer takes in insuring you and your home. It is a very complex calculation, and carriers are constantly changing their views of risks based on new claims experience and other factors. This is why you should shop often, and always compare not just price but coverage and reputation.

You can get quotes online by entering your coverage needs, and you can also find quotes from independent agents and brokers who work with multiple companies. Be aware, though, that brokers often charge their fees in addition to those of the home insurance company they represent. You can also do research by checking ratings and reviews on websites that rate the financial strength of insurance companies, customer satisfaction, processing of claims, and other measures of performance.

Once you decide on a policy, you should shop around again when your homeowners insurance is due for renewal. Many people who purchase a policy figure it’s one less item to worry about, and they may forget to look for competitive prices or other terms and conditions that may have changed.

It’s also a good idea to re-shop your policy every time you see an increase in your premium. In addition to looking for better rates, you should also consider whether your deductibles make sense in light of the potential risk of making a claim.

Homeowners insurance is a crucial aspect of protecting your investment and ensuring financial security in the event of unexpected events or disasters. This insurance policy provides coverage for your home, and its contents, and liability protection for accidents that may occur on your property.

One of the primary benefits of homeowners insurance is the coverage it provides for your dwelling. In the unfortunate event of a fire, storm, or other covered peril, your insurance policy will pay for the repairs or rebuilding of your home. This can save you from the financial burden of having to pay for these expenses out of pocket.

Additionally, homeowners insurance covers your personal belongings. This includes furniture, appliances, electronics, clothing, and other items that may be damaged or stolen. If your home is burglarized or damaged by a covered event, your insurance policy will reimburse you for the value of these items, allowing you to replace them without incurring significant costs.

Another essential aspect of homeowners insurance is liability protection. If someone is injured on your property and files a lawsuit against you, your insurance policy will cover legal expenses and any damages awarded. This can provide peace of mind and protect your assets in case of an accident or injury on your property.

It is important to note that homeowners insurance policies vary in coverage and cost. Factors such as the location, size, and age of your home, as well as your claims history, can affect the premium you pay. It is advisable to shop around and compare quotes from different insurance providers to ensure you get the best coverage at an affordable price.

In conclusion, homeowners insurance is a vital investment for any homeowner. It provides financial protection for your home, personal belongings, and liability. With the right coverage, you can have peace of mind knowing that you are protected against unforeseen events and disasters.