6 Types of Homeowners Insurance Explained

Homeowners insurance can seem complicated, but once you get to know a few common terms, you’ll be well on your way to choosing the best policy for your family. We break down six types of homeowners insurance coverage, their meaning and how they can help you protect your home and property.

Personal property coverage (or inland marine coverage) can help protect those items that may not be entirely covered by your homeowners policy. This kind of homeowners insurance coverage protects items like antiques, jewelry and other valuables from loss or theft.

1. Replacement Cost Coverage

   This type of homeowners insurance coverage pays you the full amount to repair or replace your damaged or lost possessions, regardless of depreciation. Basically, it restores you back to the position you would have been in had the harm not happened.

2. Actual Cash Value

   Similar to replacement cost coverage, actual cash value pays for covered losses to your home up to the current value. In other words, this homeowners insurance coverage type gives you the value of these losses, minus any depreciation.

3. Guaranteed Replacement Cost Coverage

   Say there’s a natural disaster like a tornado, and your home is so extensively damaged that you need a complete rebuild. Having guaranteed replacement cost coverage could pay off. It pays repair and replacement costs up to 125 percent of the insured value of your home.

4. Umbrella Liability Coverage

   Umbrella coverage extends beyond the protection provided by your homeowners and auto policies — for example, if you’re in an accident and your medical bills surpass what your auto insurance can pay.

5. Residential Equipment Breakdown

   For the electrical items not covered under your homeowners policy (think: air conditioner, appliances and computers), residential equipment breakdown coverage can provide protection. Should the unexpected happen, this form of coverage will ease the financial burden that replacing these items can bring.

6. Personal Property Coverage

Get Covered!

Now that you’ve brushed up on the different types of homeowners insurance, talk to your Farm Bureau agent about the coverages you need to protect what matters most to you.