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Not every insurance quote you get is the same and not every insurance company is the same. It is important to understand what options you have for home insurance so you know what will be covered. Here is a breakdown of the most common coverage options on a homeowner's policy:

Standard Coverage on Most Homeowner's Insurance Policies

Dwelling Coverage - This protects the building and any attached structures like a deck. This not directly related to the value of your house but it gives a good starting point. Many companies will use a system to determine the dwelling coverage so each quote will be different. A good rule of thumb is $100 per square foot to rebuild a standard home, if the house is a custom built it can go up to $350 per square foot. For example a 2000 sqft house would need approximately $200,000 in dwelling coverage. Be sure to have the agent explain why they used the number they did.

Personal Property - Everything in your home will usually fall into this category including but not limited to clothes, stereo, dishes, furniture, and computer. Most home insurance policies will offer 75% of the dwelling coverage as personal property coverage. For example a house with $100,000 in dwelling coverage would have $75,000 in personal property coverage. In most cases this property is covered worldwide in case it is stolen when outside the home location. Be sure to have replacement cost included as part of the coverage so the value of each item is not depreciated over time.

Liability Insurance - Not a commonly used coverage but when it is needed it serves as a great protection from a large financial loss. This type of coverage is used when you cause harm to another person or their property outside of the use of your vehicle. Known cases include slipping and falling on ice of a property or lawn mower throws a rock into a window but can involve more deadly cases. The best idea is to carry a minimum coverage greater than your net worth including retirement assets, liquid assets, real estate and other items that can be used to pay a liability lawsuit claim.

Guest Medical - This coverage is often referred to as don't sue me coverage. If a guest at your home is injured on or around your property you can use this coverage to pay for expenses related to medical, dental, x-ray, ambulance and more. By paying for their medical expenses hopefully they won't sue you.

Optional Coverage

Jewerly Floater - Many married couples don't realize that an engagement ring is not covered on a standard home insurance policy. The average engagement ring is valued at $8000 so it is a large investment for most couples. To ensure it is protected against theft, fire, loss and other covered occurances choose to have a floater added to your policy. You will usually need to get an appraisal that is no older than 3 years.

Flood Coverage - Covered by the National Flood Insurance Program (NFIP) most home insurance policies don't include flood coverage. While flooding can occur in any state it is most common in the coastal states but that doesn't mean someone in Oklahoma doesn't need it. If you live in a flood zone it will be ranked on a Flood Insurance Rate Map to determine the premium for that area. Check floodsmart.gov for more information.

 

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