Homeowner’s Insurance

The following are the primary coverages provided in the homeowners policy:

  • Building coverage for your home, garage, and other structures.
  • Coverage for your household contents and personal belongings.
  • Reimbursement for costs to temporarily live at another place while your home, damaged for a covered loss, is being repaired.
  • Personal liability insurance to protect you against a claim or lawsuit that results from allegations that you may have caused bodily injury or property damage to another person.
  • Medical payments to others.

It is important to understand what is covered in your policy. These are a few of the questions to consider when determining your coverage needs:

  • Do you have adequate limits of coverage?
  • Are you insured for replacement cost on your home?
  • Do you have actual cash value or replacement cost coverage for your contents?
  • Are you covered for specific perils, or for all perils except those that are excluded for both your home and contents?
  • Do you have the necessary endorsements to provide you the level of coverage that you feel is adequate for your needs?

As in all insurance policies, it is important to understand the coverage, conditions, exclusions, exceptions, and available endorsements. There are many homeowner insurance policies available depending on what the company has to offer. Discuss the different policy and coverage options with your agent.

It is always advisable to request a copy of the completed, signed application. Representations made in the application may impact your coverage.

If you are a member of an association or a homeowner association as defined in Title 57, Chapter 8a of the Real Estate Code, you may want to review Sections 401, 402, 403, 404, 405, 406, & 407 of the Real Estate Code to determine what impact these statutes will have on you.

Flood, earthquake, earth movement, and mudslide are examples of perils typical not covered on a homeowners policy. Coverage for these perils can be obtained by endorsement, or by individual policies. Check with your agent to learn more about what is available.

We suggest you review your coverage annually with your insurance agent. Changes in circumstances, property values, remodel and additions to the property, or other pertinent factors, may require adjustments to your policy.

The following links will take you to additional information regarding homeowners insurance:

What’s the difference between actual cash value (ACV) coverage and replacement cost (RCV) coverage?

Insurance policies have different levels of coverage, so your out-of-pocket expenses will vary when you file a claim with your homeowners insurance policy. That’s why it’s important to know the difference between actual cash value and replacement cost.

If you have actual cash value (ACV) coverage, your policy will pay the cost to repair or replace your home or personal property based on its value, considering its age and wear and tear (depreciation). ACV coverage pays for your loss but often does not pay enough to fully replace your property or repair the damage.

If you have replacement cost value (RCV) coverage, your policy will pay the cost to repair or replace your damaged property using materials of a like kind and quality. This is different from your home's market value, which includes the price of land and depends on the real estate market.

Here’s what the different types of coverage could look like in action.

Let’s say a family owns a house. The house has $10,000 worth of damage. They have replacement cost value coverage. So, their policy will pay $10,000 to repair the home, minus their deductible. (The deductible is the amount you pay out of your own pocket before your insurance policy kicks in.)

But if the family had actual cash value coverage, the payout would be different. If the family had $10,000 worth of damage to their home, the insurance company would consider the age and condition of the home when paying out the claim, minus their deductible.

If you need help deciding which policy is best for you, contact us at (801) 957-9305 or prop.cas@utah.gov, or talk to your insurance agent/company. Additionally, the NAIC’s Shopping Tool for Homeowners Insurance offers more detailed information on this topic.

Disclaimer – Links to Other Websites
As a convenience to our users, the Utah Insurance Department offers links to certain websites created and maintained by other public and/or private entities. The Department has no control over linked sites and cannot guarantee, or be held responsible for materials found on any non-departmental site. A link to another website is NOT a Department endorsement of that site.