Most standard Homeowners Insurance Policies will provide coverage for damage to your home (and many of the items in your home) caused by:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Homeowners Insurance also provides coverage for liability claims, medical payments to third parties, and legal costs if a lawsuit is brought against you. The most common amount of liability coverage included in a homeowner’s policy is $100,000, but you may need much more, depending on your circumstances.

Read the Fine Print.
Read your Homeowners Insurance Policy to find out exactly what is and what is not covered. Do this before you suffer a loss, so there won’t be any surprises. Most insurance companies exclude damages caused by an act of war, nuclear accident, flood, earthquake, and terrorism -- although you may be able to purchase special homeowners insurance policies or endorsements that will cover these events.

A Diamond is a Homeowner’s Best Friend.
Most Homeowner’s Insurance Policies limit coverage for certain high-priced or hard-to-replace items. Additional endorsements or floaters will be necessary to protect items like engagement rings, watches, furs, antiques, and other valuables. You'll need to have each item appraised.

The Magic Number.
Mortgage lenders require that borrowers purchase a minimum amount of Homeowners Insurance (typically equal to the appraised value or the purchase price of the home). But this is often not the amount of homeowner’s insurance coverage you truly need. Instead, find out how much it would cost to rebuild your home and consider insuring it for that amount.

You Get What you Pay For.
Are you willing to pay more to have damaged personal property replaced? If so, consider purchasing replacement cost coverage with your Homeowner’s Insurance Policy. When it comes to valuing property, insurers generally use one of two methods: 1.) The first, actual cash value pays you an amount equal to the replacement value of the property; minus depreciation for the years you owned the item. 2.) The second, replacement cost, is more expensive, but it pays you the full value of the item today, so that you can replace the old item with a new one.

How Deep are your Pockets?
To save money, consider choosing a deductible of $250, $500, or even $1,000. In the event of a loss (e.g., water damage from a leaky roof), you'll be required to pay this amount out of your own pocket before your Homeowner’s Insurance Policy takes over, but in the meantime, you'll save on premium charges.

Sound the Alarm.
Don't forget to tell your insurer if you have a home security system (e.g., fire, burglar, emergency). Most insurers offer discounts for such safety features. You may also qualify for a lower Homeowner’s Insurance Premium if you live near a fire department /fire hydrant, own a newer home, own a home built out of fire-resistant material, or get your auto insurance from the same company.