Understanding Home Insurance: Coverage, Costs and Ways to Save

Homeowners often turn to search engines asking, “What does home insurance actually cover?”, “Is flood damage covered?”, “Why did my premium go up?” or “How can I lower my homeowners insurance costs?”. This post answers these questions and provides tips for comparing policies and reducing premiums.

What home insurance covers

A standard homeowners insurance policy protects four primary things: the dwelling, personal property, liability, and additional living expenses. Your dwelling coverage pays to repair or rebuild your home if it’s damaged by covered perils like fire, lightning, windstorms or hail; earthquake and flood damage are almost always excluded. Personal property coverage protects your belongings both inside and outside the home (for example, stolen golf clubs may be covered under home insurance, not auto insurance). Liability coverage pays for injuries to others or damage to their property arising from your home. Additional living expenses coverage pays for hotel stays or rental costs if you can’t live in your home due to a covered loss.

What’s not covered

Common exclusions include flood and earthquake damage, poor maintenance or wear and tear, and damage from sewer backups. Floods and earth movement are specifically excluded; separate flood insurance or sewer backup coverage is needed. High‑value items like jewelry, art or collectibles may exceed policy limits, so consider adding a personal articles floater or scheduling these items.

Choosing the right deductible

The deductible is the amount you pay out of pocket before insurance kicks in. Higher deductibles lower your premium but mean you’ll pay more when you file a claim. The Glenpool agency notes common options are $1,000, $2,500 or $5,000; choosing a higher deductible can reduce your premium significantly. However, ensure you have enough savings to cover the deductible if a claim occurs. Some policies have separate percentage‑based deductibles for wind or hail losses, common in tornado‑prone regions.

Why premiums increase

Homeowners often ask why their insurance premiums rise when they haven’t filed claims. Premiums can go up for reasons beyond your control: increases in construction costs due to inflation or supply chain issues, more frequent wind and hail storms leading to larger claims, and insurance company losses across an entire region. 

Ways to reduce your homeowners premium

1. Increase your deductible: As mentioned earlier, raising your deductible lowers your premium. Just be prepared to pay more out of pocket if a claim occurs.
2. Bundle policies: Many carriers offer discounts when you purchase home and auto insurance from the same company.
3. Improve security: Installing smoke detectors, burglar alarms or deadbolt locks can lead to discounts.
4. Review coverage annually: Make sure your policy reflects current rebuilding costs and remove unnecessary endorsements.
5. Ask about wind/hail deductible options: If you live in an area prone to tornadoes or hail storms, ask whether you can choose a specific deductible for wind/hail claims. Some insurers offer a fixed deductible instead of a percentage of your home’s value.

FAQs

Does home insurance cover water damage? 

It depends. Sudden and accidental water damage (such as a burst pipe) is typically covered, but gradual leaks, sewer backups and floods require separate coverage. Many insurers sell endorsements for water backup and sewer overflow.

Will my personal property be covered if stolen from my car? 

Yes, personal property is covered under your homeowners policy even if items are stolen from your vehicle. Auto insurance covers the vehicle itself; home insurance covers the contents.

Is replacement cost coverage worth it? 

Replacement cost pays to rebuild or replace your home and belongings at today’s prices without deducting for depreciation. Actual cash value pays the depreciated value. Choosing replacement cost coverage ensures you can rebuild to current standards, which may be more expensive than your home’s original purchase price.