Homeowner’s insurance is not one-size-fits-all. Each insurance plan typically includes different coverage for different aspects of your home. It may include dwelling coverage, personal property coverage, liability coverage, or additional living expenses coverage. Not every plans covers each of this categories equally, so it’s important to know which plan best suits your situation, not just whichever is cheapest.

This means you should estimate the value of your personal belongings, evaluate your home’s risk factor for injury, and assess the likelihood of your home being temporarily unavailable. Doing this will help you figure out whether you need personal property coverage, liability coverage, or additional living expenses coverage, respectively. But don’t forget that the first step is actually determining the value of your home itself. That’s likely what’s going to be the most valuable, so you want to make sure you have suitable coverage for it. In order to do that, you also need to look at the insurance plan’s deductible. If the plan has relatively low insurance premiums, that could mean it has a high deductible, meaning you’d be paying quite a bit out of pocket before the insurance kicks in at all. If the cost of a total replacement is relatively low, though, a low premium plan could be right for you.

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