Home insurance isn’t one-size-fits-all. There are standard policy types available from all of the best home insurance companies, but recent market shifts mean you should verify details like loss settlement (replacement cost vs. ACV), catastrophe deductibles, and roof terms before you buy. HO-3 remains the most common owner-occupied form, with coverages A–F and exclusions like flood and earthquake unchanged in principle (NAIC; Insurance Information Institute). Since 2020, many insurers have tightened underwriting (e.g., roof age/condition), added or raised separate wind/hail and hurricane percentage deductibles, and increasingly limit older-roof claims to ACV or roof schedules (Texas Department of Insurance; Triple-I market update). You can customize limits, choose endorsements, and use mitigation credits (e.g., IBHS FORTIFIED Roof or wildfire hardening programs) where offered to make coverage both adequate and more affordable (Deloitte 2025 outlook; LexisNexis 2025 Home Trends).
Step 1: Check Your ‘Basic’ Coverage
Every insurer’s policy form is a little different, but most homeowners in the U.S. carry an HO‑3 (see policy types). Confirm the foundation first, then drill into today’s pain points: separate wind/hail or hurricane deductibles (often 1%–5% of Coverage A and triggered by state-specific rules), roof settlement for older roofs (ACV vs. replacement cost), water-damage sublimits, and ordinance or law limits (NAIC hurricane deductibles; TDI).
- Dwelling coverage, meaning your home and anything attached to it — typically replacement cost if insured to value; ask about inflation guard and extended/guaranteed replacement cost options (+25%/+50% vary by carrier) (NAIC).
- Other structures on your property like fences, garages, or guest houses — usually a percentage of Coverage A; confirm if separate wind/hail or hurricane deductibles apply by peril (NAIC).
- Personal property like furniture and (some) appliances (for more appliances and systems, you’ll need a home warranty) — often ACV by default; you can upgrade to replacement cost or consider an HO‑5 for open‑perils on contents (Triple‑I).
- Liability and medical costs if someone is injured on your property and/or sues — verify your base personal liability limit (commonly $300,000) and whether personal injury is included (NAIC).
- Loss of use coverage to cover living expenses if you need to relocate while your home is being repaired or rebuilt — check daily and aggregate limits and any time caps (Triple‑I).
An HO-3 policy only applies in a predetermined set of circumstances, also known as the “16 perils.” If your home is damaged by something that isn’t on this list — like floods or earthquakes — you won’t be able to file a claim. In today’s market, also watch for cosmetic-damage exclusions on roofs/siding and age-based roof settlement schedules, which can reduce payouts even when a named peril applies (TDI; Triple‑I market update).
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Damage caused by aircraft
- Damage caused by vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Volcanic eruption
- Falling object
- Weight of ice, snow, or sleet
- Discharge or overflow of water or steam from plumbing, heating, air conditioning, fire-protective sprinkler system, or household appliance
- Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, air conditioning, or fire-protective system
- Freezing of a plumbing, heating, air conditioning, or fire-protective system, or household appliance
- Sudden and accidental damage from artificially generated electrical current
Given construction cost volatility and tighter underwriting since 2020, right-size Coverage A using your insurer’s replacement cost estimator, enable inflation guard where available, and consider extended or guaranteed replacement cost to buffer spikes in labor/materials (Triple‑I market update; NAIC). Ask your agent to identify all deductibles: the all‑other‑perils deductible plus any separate wind/hail or hurricane/named‑storm deductibles and their triggers (often percentage‑based) (NAIC).
Step 2: Conduct a Home Inventory
Even if you can’t afford endorsements right now, you should conduct a home inventory to set accurate limits and speed up any claims process. Photograph rooms and serial numbers, save receipts, and back up files to the cloud. After a loss, best practices include promptly notifying your insurer (FNOL), mitigating further damage (e.g., tarps/shutoffs), and keeping receipts for emergency repairs; don’t discard damaged items until inspected (Triple‑I: filing a claim). If a claim is disputed, you may use appraisal/mediation/arbitration options per your policy, and state “fair claims” rules set timelines (e.g., California requires acknowledgment within 15 days and a coverage decision within 40 days after proof of claim) (California DOI). Many carriers also support digital FNOL and virtual inspections to accelerate resolution (Deloitte 2025 outlook).
Step 3: Consider Add-On Endorsements
Endorsements fill common gaps in a base HO policy. Given 2024–2025 trends, ask about these specifically: personal property replacement cost, sewer/sump water backup, service line coverage, equipment breakdown/home systems (often including smart-home tech and home EV chargers), increased ordinance or law limits (commonly 25% or 50% of Coverage A), extended/guaranteed replacement cost, and options addressing roof/wind issues (e.g., cosmetic damage, matching siding/roof where available). Some carriers also offer personal cyber coverage beyond identity theft, and dedicated home‑sharing endorsements for short‑term rentals (NAIC; TDI; Triple‑I: equipment breakdown; Triple‑I: service line; Triple‑I: personal cyber; NAIC: home‑sharing).
- Jewelry and valuable items
- Home businesses
- Water backup and sump pump damage
- Earthquake damage
- Green home repairs
- Personal property replacement cost (extra coverage for personal items)
- Identity theft protection (some providers have started adding this to their basic coverage)
Endorsements are typically inexpensive relative to the loss they avert. Water backup and service line are often tens of dollars per year for $10k–$20k limits; equipment breakdown can extend protection to HVAC/appliances and EV chargers, sometimes with “green” upgrade allowances after a covered loss (Triple‑I: service line; Triple‑I: equipment breakdown). Because repeated seepage/long‑term leaks are commonly excluded, ask about endorsements that address hidden/gradual water damage where available (TDI: water damage).
Step 4: Consider an Umbrella Policy
Umbrella (excess liability) policies sit above your home/auto to protect against large lawsuits once underlying limits are exhausted. Common starting limits are $1 million, with typical premiums around $150–$350 per year for the first $1 million and $75–$150 for each additional $1 million; recent renewals often see roughly +5% to +15% depending on risk factors (Triple‑I: umbrella; NerdWallet; Swiss Re on liability trends). Most carriers require minimum underlying limits — commonly auto 250/500 (or $300k CSL) and homeowners liability $300k — before issuing an umbrella (Triple‑I; Allstate; Travelers).
Once you have an accurate estimate of your home’s value, check to make sure your primary home insurance policy (and its endorsements) will cover everything you need it to, both in terms of cost and in terms of your property and the losses you could potentially suffer. Almost all of the the best home insurance companies offer umbrella policies, so all you have to do is ask. The price of an umbrella policy will depend on how much insurance your home already has (the more insurance, the cheaper the umbrella), but also on how risky your home is to insure. According to the Insurance Information Institute, “To write an umbrella or excess policy, most companies will require a minimum of $300,000 underlying liability insurance on your standard homeowners policy.”
Step 5: Look Into Flood and Earthquake Risks
If you live in an area prone to floods or earthquakes, you should know that a standard, “basic” HO-3 home insurance policy doesn’t cover either of those things. NOAA continues to log historically high counts of billion‑dollar disasters, including severe storms and floods, and USGS’s 2024 seismic hazard update shows widespread U.S. exposure to damaging shaking — making separate flood and earthquake coverage increasingly relevant (NOAA; USGS NSHM).
For floods:
- Check FEMA’s mapping tool to make sure your home isn’t in a flood-prone area.
- Read our guide to how flood insurance works.
- Ask you insurance provider if it’s authorized to sell National Flood Insurance Program (NFIP) policies. It probably is, but if it isn’t, you can still purchase a separate flood insurance policy yourself from the NFIP.
NFIP policies for 1–4 family homes offer up to $250,000 for the building and $100,000 for contents; they do not include Additional Living Expenses and have important basement/ground‑level limitations. ICC (Increased Cost of Compliance) can provide up to $30,000 for code upgrades after substantial damage. A standard 30‑day waiting period applies (with limited statutory exceptions), and if your property is in a Special Flood Hazard Area with a federally backed mortgage, flood insurance is required by the lender. All NFIP pricing now uses Risk Rating 2.0, which prices each property individually based on factors like distance to water and first‑floor height, with statutory caps on most annual increases (FEMA Flood Insurance Manual (effective Apr. 1, 2025); FEMA NFIP statistics).
Beyond NFIP, private flood insurers offer primary and excess options with higher limits (often $1–$5 million+), potential ALE coverage, and flexible deductibles; many lenders accept private flood that meets the federal definition. Compare NFIP vs. private on limits, exclusions (e.g., basements), waiting periods, and price; community CRS participation and property mitigation (elevating utilities, flood openings) can reduce premiums (NAIC CIPR: Flood Risk & Insurance; FEMA Manual).
For earthquakes:
- Check FEMA’s guide to see if your home is at risk for earthquakes.
- Ask your insurance provider about its earthquake endorsement. The price will depend on how risky your home is, and according to the Insurance Information Institute, deductibles “are higher than those in standard homeowners or renters insurance, usually from 5 to 15 percent of the policy limit.”
- If you live in California, you can purchase a separate policy from the not-for-profit California Earthquake Authority. Since it specializes in earthquake coverage, you may find its policies more comprehensive than those of a national insurance provider, though it’s definitely worth comparing your options.
Earthquake coverage is typically a separate policy/endorsement with percentage deductibles commonly 5%–25% applied to the dwelling limit (and sometimes other coverages). Outside California, private markets are widely available; in California, CEA offers standardized options for dwelling, contents, loss of use, and code upgrades, but excludes external structures like pools/fences. Some insurers and CEA provide benefits or discounts for retrofits (e.g., bracing cripple walls, bolting foundations) — compare deductible levels, ALE, and code upgrades across quotes (CEA Stats & Facts; USGS NSHM).
Step 6: Don’t Forget About Home Warranties
A home warranty is a residential service contract for wear‑and‑tear failures of systems/appliances — it isn’t homeowners insurance and won’t cover perils like fire or theft. Expect a monthly/annual premium plus a per‑claim service call fee; contracts include limits, sublimits (e.g., refrigerant/permits), and exclusions for improper installation, lack of maintenance, or pre‑existing conditions. Always review the state‑specific contract and the regulator/complaint process before purchase (FTC; Texas Real Estate Commission).
- Refrigerator
- Dishwasher
- Range/oven/cooktop
- Clothes dryer
- Built-in microwave
- Free-standing ice maker
- Washer
- Dryer
- Garage door opener
- Trash compactor
- Heating with ductwork
- Electrical
- Water heater
- Garbage disposal
- Air conditioning
- Ceiling fan
- Doorbell
See home warranty for more.
What’s Next?
- See our picks for the best home insurance companies. When comparing, ask for written disclosures of all deductibles (AOP plus wind/hail or hurricane), roof settlement terms, and mitigation credits (e.g., FORTIFIED Roof or wildfire hardening), and consider extended replacement cost or higher ordinance/law limits for resilience (NAIC; Deloitte 2025 outlook).
- Here’s claims process. After a loss, document thoroughly (photos/video, inventories), mitigate further damage, keep receipts, and avoid signing assignment‑of‑benefits or direction‑to‑pay agreements you don’t understand; if needed, pursue appraisal/mediation and consult your state DOI timelines (e.g., CA acknowledgment within 15 days, decision within 40 days after proof) (Triple‑I; California DOI).
