What the policy actually covers
A standard policy has dwelling coverage (the structure), other structures (fence, shed), personal property, loss of use, and liability. Lenders require enough dwelling coverage to rebuild, which is not the same as your purchase price — land isn't rebuilt.
Choose replacement cost over actual cash value wherever you can. Actual cash value depreciates your roof and belongings, so a ten-year-old roof destroyed by hail pays out a fraction of what replacing it costs.
What isn't covered
Flood is excluded from every standard policy and requires NFIP or private coverage. Earthquake is typically excluded. In hurricane and hail regions, wind may carry its own percentage deductible — on a $400,000 dwelling, a 2% wind deductible is $8,000 out of pocket before the policy pays.
Maintenance-related failures — a slowly leaking pipe, a worn-out roof — are also excluded. Insurance covers sudden accidental events, not deferred maintenance.
How to lower the premium
Raise the base deductible from $1,000 to $2,500 if you have reserves; the savings are often 10%–20%. Bundle auto and home. Ask specifically for discounts tied to a new roof, impact-resistant shingles, monitored alarm, water shutoff devices, and claims-free history.
Shop the policy every renewal, not every five years — carriers reprice aggressively, and loyalty is rarely rewarded. If your premium is escrowed, send the new declaration page to your servicer so the escrow analysis reflects it.
Is this path right for you?
Frequently asked questions
Why did my premium go up without a claim?
Rebuild costs, regional catastrophe losses, and reinsurance pricing drive most increases. It's usually a market-wide move, not personal.
Do I need flood insurance?
You must have it in a designated high-risk flood zone with a federally backed loan, and it's worth pricing anywhere — a large share of flood claims come from outside high-risk zones.
Can I change insurers mid-loan?
Yes. Buy the new policy, cancel the old one, and send the new declaration page to your servicer.
Related guides
- The Complete First-Time Homebuyer's Readiness Guide
- How much home you can actually afford
- Pre-approval checklist
- Back to the Knowledge Base
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