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Understanding home insurance can be confusing, but it’s one of the most important ways to protect your investment. Depending on where you live, if you own collectibles or tools, or if you have a swimming pool in your backyard, your homeowner’s insurance needs to provide enough coverage if there is an accident. These are just a few of the most important questions you need to ask when purchasing or changing insurance of your home.

#1 Do I need an actual cash value or replacement cost policy?

Although you don’t want to think about losing your home to a fire or natural disaster, accidents happen. An actual cash value policy may be less expensive, but a replacement cost policy will pay up to your coverage limit and all you need to pay is the deductible. If your home is older, ACV policies take into account the depreciation on your home, but a replacement will look at how much it will cost to rebuild or repair the house in today’s market.

#2 Should I include endorsements on my policy?

An endorsement is a specialized coverage that is designed for your family and your situation. If you own expensive jewelry, heirlooms, or tools – you need specific coverage for these items. Whether you are worried about theft or a disaster – you should add an endorsement to cover the value of these items. Home insurance was created to help you get your life back to normal quickly, the right coverage is necessary.

#3 What is personal liability coverage?

Personal liability coverage takes care of expenses if someone is injured while visiting your home. If you have a party and someone slips or falls, you could be sued. This type of coverage will help to pay legal fees and medical bills of the injured person. If you own certain dog breeds or if you have a swimming pool or trampoline in the backyard – be sure you have adequate coverage.

#4 Is flooding covered under my basic homeowners’ policy?

Most insurance plans cover fire, lightning strikes, hail, and even windstorms, but not all policies cover flooding or earthquakes. Although your policy should cover a flood caused by broken pipes or a defect in the home, if you live near a river or other water source – you might need to consider adding flood insurance to protect your home and property.

#5 How much home insurance do I need?

Determining the amount of insurance you need depends on the square footage of your home and what type of material it’s made from. If you have a huge house made from brick, you will need more coverage than a small cottage made with wood siding. If you have a large garage or outbuildings, you will also need additional coverage. Once you decide the amount of coverage you need for the structure, take an inventory of your personal property and choose your coverage limits based on how much it would cost to replace the home and personal items.

Contact your Franklin State Farm Agent, Ed Underwood for advice on the best home insurance for you. Click here to get a quote or call 615-771-0700 to get information. Like Ed Underwood on Facebook!

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