With our educational insights and helpful advice, you'll broaden your understanding of home insurance and find the right coverage for your needs.
Expand Your Knowledge Of Home Insurance In Westminster, CO
We've worked hard to create this insightful guide for you. But we know it doesn't have all the answers.
What Is Homeowner's Insurance?
Homeowner's insurance is exactly what it sounds like: it's insurance for your home.Your insurance policy will compensate you for covered events/perils if your property is damaged or destroyed. These may include things like:
- Destruction and/or damage to your home's interior or exterior
- The loss or theft of personal possessions
- And personal liability for harm to others
What Is Covered By Homeowner's Insurance?
Every homeowner's insurance policy is different from the last. This is because these policies can be hyper-customized to the property and the policyholder's needs.
Standard homeowner's insurance policies provide 6 different types of coverage. These include:
- Dwelling coverage - For damage to your home and attached structures.
- Personal property coverage - To repair or replace belongings that are stolen or damaged in a covered event.
- Liability coverage - Pays for injuries of others or for property damage that's caused unintentionally or through neglect.
- Coverage for other structures - This includes things like sheds, fences, and other structures that are unattached to your home.
- Additional living expenses coverage (ALE) - To pay for temporary living expenses while your home is being repaired or rebuilt.
- Medical payments coverage - To treat someone injured on your property, regardless of who's at fault. This coverage will also pay if you, a family member, or a pet injured someone elsewhere.
What Are The Different Types Of Home Insurance?
As you may have guessed, there are several different types of homeowner's insurance (also called "policy forms"). These policy forms offer very different forms of coverage, so it's helpful to understand the differences between these types. Here's a brief rundown:
- HO-1 - Called the "basic form," an HO-1 policy offers the narrowest type of coverage that's typically limited to around 11 named perils. HO-1 policies may not cover personal belongings and many insurers no longer offer this type of policy form.
- HO-2 - Referred to as the "broad form," an HO-2 provides limited coverage that is broader than an HO-1. This policy form also covers personal property in the home.
- HO-3 - Known as the "special form," this is the most common policy form of homeowner's insurance because it provides a broad range of coverage. HO-3 policies cover almost any peril (up to 16) unless it is listed as an exclusion.
- HO-5 - Similar to HO-3 policies, the HO-5 covers almost any peril that isn't called out for exclusion. However, the HO-5 is more comprehensive, covers personal property for almost every peril, and comes with a higher price tag. Sometimes called the "comprehensive form," this policy form is typically available only for well-maintained homes in low-risk areas.
- HO-8 - This policy form is designed for older homes with a replacement cost that exceeds the actual cash value of the home. Typically historic homes and registered landmarks carry this type of policy.
While it varies from person to person, a majority of homeowners will opt for the HO-3 policy form.
Which Types Of Damage Are Covered?
As mentioned earlier, home insurance policies will only reimburse you for "covered perils." Unfortunately, this means that not every kind of property damage will be covered by your policy. As the Insurance Information Institute notes, most homeowner's insurance policies cover the following perils:
- Fire and smoke damage
- Lightning strikes
- Windstorms and hail
- Vandalism or theft
- Water damage
- Falling objects
- Damage caused by a car or vehicle
However, every homeowner's insurance policy is unique, so it's important to check your policy to learn exactly which perils are covered by your insurer.
Which Disasters Are Not Covered?
Again, remember to check your policy to learn exactly what is and isn't considered a "covered peril" by your provider. In general, most homeowners insurance policies won't cover damage caused by the following disasters:
- Maintenance-related damage
- Sewer backup
How Much Coverage Do I Need For My Home?
The amount of coverage you need for your home will be dependent upon your own unique circumstances. You'll need enough homeowner's insurance to cover the cost of rebuilding your home if it's destroyed.
But remember: your home's value is different from your rebuilding costs. To estimate the costs of rebuilding your home, multiply the square footage of your property by local construction costs per square foot. Check out other best practices for calculating dwelling insurance costs from ValuePenguin.
With that number in mind, you can calculate your projected amount for each type of coverage. Here's a rough idea of how your coverage amounts should break down:
- Dwelling coverage - Enough to rebuild your home.
- Personal property - 50%-70% of your dwelling coverage.
- Other structures - 10% of your dwelling coverage.
- ALE - 20% of your dwelling coverage.
- Liability coverage - Roughly $100,000 to $500,000.
- Medical payments - $1,000 to $5,000.
Which Policy Add-Ons Should You Consider?
Even an HO-3 policy won't cover every kind of peril or event. If you want to ensure your property is well-protected, then you need to consider a handful of policy riders/add-ons. These may include:
- Sewer backup protection
- Flood insurance
- Earthquake coverage
- Inflation coverage
- Ordinance coverage
- Extended replacement cost coverage
These add-ons can make a significant difference in the future of your property.
Where Can I Buy Home Insurance In Westminster, CO?
Right here! At Adler Insurance Group, we can provide the quality custom coverage that your home deserves at an affordable price point. We'll make sure your property is effectively protected from virtually every kind of peril and we'll help you acquire every possible discount on your policy.
Contact Adler Insurance today to get your FREE quote for home insurance in Westminster, CO.