While most homeowners know the basics of insurance, many don’t realize how much customization is available. The right policy isn’t always the standard one—it’s the one tailored to your needs. Here’s how to go beyond the basics and maximize your protection.

Understand Replacement Cost vs. Actual Cash Value
When it comes to claims, this distinction is critical:

Replacement Cost pays to rebuild or replace without factoring depreciation.

Actual Cash Value deducts depreciation, giving you less money.

Tip: Always opt for replacement cost coverage if you can afford it—it’s worth the higher premium.

Customize Personal Property Coverage
The default coverage might not be enough for high-value items. Consider scheduling additional coverage for:

Jewelry

Art

Musical instruments

High-end electronics

Some insurers require appraisals for these additions, but the peace of mind is worth it.

Add Ordinance or Law Coverage
If your home must be rebuilt after a loss, you may be legally required to bring it up to modern codes. This can be expensive. Ordinance or law coverage helps cover the cost of these code upgrades.

Don’t Overlook Water Backup Coverage
While flood insurance is a separate policy, water backup coverage helps when sewers or drains back up into your home—an often overlooked risk.

Consider a Higher Liability Limit or Umbrella Policy
Standard policies usually cover $100,000–$300,000 in liability, but that may not be enough if you’re sued. A personal umbrella policy can add an extra $1 million or more in coverage, and it’s relatively inexpensive.

Understand the Claims Process
Know how your insurer handles claims:

Is the process online or in person?

How fast is the turnaround?

Are contractors vetted or your choice?

Read reviews and consult with your insurance agent to ensure the claims process is fair and transparent.

Review Annually
Your insurance needs can change:

Renovations increase rebuild value.

Acquiring valuables affects personal property limits.

Local weather patterns may shift, prompting different riders.

Update your policy at least once a year.