Homeowners insurance shields your most valuable asset from unexpected threats, as well as protecting your financial future from lawsuits and liability claims. With many options available, shopping for coverage can be overwhelming, especially for first-time homeowners who may not understand the benefits. Below are answers to a few common questions you may have if you’re shopping for the first time.

4 FAQ About Homeowners Insurance

What’s the difference between market value and replacement cost?

The market value of a home is the price the average buyer would pay to purchase the property today, whereas the replacement cost is how much money it would take to rebuild your current home. If a covered accident destroys your home entirely, the market value may not be enough to rebuild. This is why policies based on replacement costs are usually better.

Will homeowners insurance protect all belongings?

While the standard homeowners insurance policy may include coverage for your possessions, certain categories of items are subject to individual limits. For instance, you might have $60,000 in personal property coverage but can only apply $5,000 of that toward jewelry. If you have especially valuable items, ask your agent about extending coverage limits or purchasing an additional policy.

What situations does homeowners insurance cover?

While the specific perils vary between carriers, most policies cover losses due to fire, hail, high wind, tornadoes, and theft. However, they typically exclude flood and earthquake damage, so consider extending coverage if you live in a high-risk area.

Does homeowners insurance protect against lawsuits?

One of the most valuable provisions of standard homeowners insurance policies is liability coverage, which protects your savings, home, and other assets. If someone injures themselves on your property or anyone in your household causes an accident, your insurer will pay the damages, along with your legal fees.

If you’re buying your first home, let Farmers Insurance® - Andrew Chao provide the protection and peace of mind you need. This dedicated agent proudly offers policies from one of the nation’s leading carriers and provides detailed advice to homeowners throughout the St. Louis, MO, area. Get more tips and advice on Facebook, and call (314) 300-7690 to request your free quote today.