There are countless things to consider when buying your first home. Is the house in a good neighborhood to raise children? How is the commute? Can you handle it? What about making sure your new home and its contents are adequately protected? Breaking down the details of your homeowners insurance policy may not be top of mind in the midst of closing on your first home, so we’ve broken down some important things to know.

Basic coverage

Standard homeowners insurance policies protect your home against damage or loss due to fire or lightning, wind or hail storms, theft, smoke damage, broken glass, falling objects, the weight of snow, ice or rain, and electrical damage up to a certain dollar amount. It also covers your personal belongings up to a certain amount.

Replacement cost coverage

If your home is destroyed, a standard homeowners insurance policy will cover the cost of rebuilding your home and also cover additional living expenses you incur while rebuilding. Replacement cost includes the cost of construction labor and materials, but does not deduct depreciation, so it is based on today’s costs. Although it accounts for inflation, it only covers up to 100% of the cover amount you decide on your policy.

Additional replacement cost coverage

Some insurance companies offer additional replacement cost coverage, which includes the cost of construction labor and materials, without limit, and accounts for inflation. This is the only option that guarantees you will be able to rebuild the same home in the same location without having to pay out of pocket for repairs.


Your deductible is the amount of money you pay yourself before your insurance starts. It can range from $100 to $10,000. If you choose a low deductible, you are taking less risk, so your premium will go up. A higher deductible means more risk for you and your bill goes down. When deciding on a deductible, homeowners must consider their ability to pay out-of-pocket expenses at the time of the loss. Higher deductibles result in lower premiums.

Obligation and medical payments

Medical Liability and Payments Medical liability and payment coverages are automatically included with each of our home insurance options listed above. Liability coverage protects you when people other than those who live in your home are injured while on your property.

Floods and earthquakes

Homeowners insurance does not cover flood damage as a result of a natural phenomenon such as tidal waves, rainfall or even sewer backups. Flood insurance can be purchased through the National Flood Insurance Program and is required if your property is located in a flood zone. However, water damage to your home due to frozen pipes, broken fixtures or an overflowing bathtub is usually covered. Property damage due to an earthquake is also not covered by a standard homeowners insurance policy. It must be added as a separate endorsement or policy and may be subject to a separate discount. Most states offer a separate earthquake approval.

Umbrella insurance

Umbrella coverage is additional liability protection that extends to both auto and home policies to cover certain perils that may exceed those limits or that are not covered by either, such as defamation, false arrest, slander and more.

Beautiful jewelry

Like most insurance policies cover damage to your home up to a certain dollar amount; valuable personal items are also only covered up to a certain dollar amount. If you have fine jewelry, expensive artwork, or valuable heirlooms, you’ll want to list them separately so you can increase protection for those high-value items.


If your friend slips and falls on the ice on your property, the medical payments on your home insurance policy usually help cover the medical claims that are filed. However, if you or another resident falls on the same piece of ice, your health insurance will kick in to cover those claims.

Home business

If you run a small business out of your home, it’s important to purchase a separate insurance policy or add coverage to your current home policy to cover any business liabilities or equipment. These items are usually not covered by your standard home insurance policy.

Like most other insurance policies, your home insurance has limitations on what is and isn’t covered. Your policy can give you coverage for many different risks you face as a homeowner, but what’s covered varies depending on the policy you choose. After all, take the time to fully understand your home insurance policy. Consult with your insurance representative to learn about the exact coverage you have. Be sure to ask questions because every state, every home and every situation is different.

Contact one of COUNTRY Financial’s Colorado agencies at Fort Collins (970) 221-9655, North Denver (303) 940-6864 or South Denver (303) 368-5202, with questions.

Home insurance policies issued by COUNTRY Mutual Insurance Company®, Bloomington, IL.

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