Worried about buying the right type of home owner insurance? When do you have enough or too much? You need the proper level of protection, plus special provisions for valuables such as jewelry, your computer equipment and other possessions. How about flooding or earthquakes (hazardous earthquakes are rare in Minnesota, but some mortgage companies may require you carry the coverage)?

When you purchase a home, the lending institutions usually require mortgage customers to purchase homeowners insurance. Those levels are the minimum levels designed to protect the house itself, but not necessarily your possessions. That’s why it’s important to check with your agent, to make sure you have adequate coverage.

Policy types
There are several types of home insurance policies: Starting from a basic policy which covers your house and possessions against a few different perils ...to an extensive homeowners policy which covers damage from practically everything except specifically excluded events (like earthquakes, wars and floods). There is also special policies for renters, condomimiums, older homes, landlords and mobile or manufactured homes.

The application process
Many things play a role in determining your premium.The insurance company will ask you about everything from employment history to past loss history.

You’ll have to decide what type of homeowners policy you want, the deductible, and payment plan. Your agent may have you make a list of valuables and their worth, which will help the agent or insurance company determine how much it would cost to replace your home and many of the items inside. For more expensive property, such as jewelry and computer equipment, you might need special coverage in addition to the basic policy.

Home factors
Many factors go into determining the premiums for a homeowners policy. The age of your home, the materials used to build it, where it’s located, the square footage, and the number of rooms all play a role.

How do you heat your home? What’s the overall condition of the house? How many people live in your home? How close is your home to the nearest fire station and fire hydrant? The answers to these questions also help determine how much you’ll pay for your homeowners policy.

How can you save money on
your home insurance?
If your home is equipped with an alarm system, smoke detectors and deadbolt locks, you could save money. If you have an in-ground pool or a trampoline, you might pay higher premiums.

What are Dollar limits?
If you insure your house for $100,000, that´s the most you will get if it is destroyed, unless you ask for an expanded replacement cost rider. Ask your agent to explain ... don´t wait until you have a claim to learn your policy´s limit.

Personal property replacement cost
What is the difference between ‘replacement cost’ and ‘actual cash value? Most homeowner policies contain replacement cost coverage on the home and actual cash value coverage on personal property.

Homeowners policies automatically cover household contents - furniture, appliances, etc. What would happen if a burglar steals your six-year-old television set? With actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

Make a list and check it twice.
Do get caught after the storm with not enough coverage. Taking inventory will help you decide how much insurance you need.

To simplify claims, you should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place. Even make copies for an offsite safe place.

Ask your agent about other safeguards.
How about off-premises theft protection and unauthorized use of your credit cards? Make sure you understand which provisions are included and which might require supplemental premiums.

Supplemental coverage
Depending on what you own and where you live, you might need to supplement your policy.

Flood insurance
Homeowners policies do not cover flood damage. The National Flood Insurance Program (NFIP) offers flood coverage in many areas. Princeton Agencies, Inc. (PAI) can sell NFIP flood policies and can tell you about the program in your area.

If a mortgage lender determines a home is in a special flood hazard area, the borrower might be required to purchase flood insurance.

Earthquake insurance
If you are concerned about earthquakes, you can get coverage with a separate policy.

Extra coverage (Endorsements)
Extra coverage endorsements expand or increase the coverage on certain items. Some of the most common endorsements cover jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment, and radio and television satellite dishes and antennas.

Other things to consider are:

• Personal umbrella liability insurance
• Higher deductibles, lower premiums
• Check your credit rating. It could plan an important part in lower premiums.