Not All Home Insurance Are Created The Same
Steven Conway • May 11, 2024
Not All Home Policies Are Created Equal
For many when comparing home insurance options, the price difference is the one and only thing people use for comparison. However, using this evaluation method as the sole determinate often leaves the insured with additional out of pocket expense at the time of a claim.
For many, their home maybe the single most expensive asset they own. When shopping for personal home insurance, do not hesitate to ask questions and understand what the coverages are.
- What does the policy cover? Understand the extent of coverage for your home, including primary dwelling coverage, other structures, personal property coverage, liability coverage, and additional living expenses coverage.
- What are the policy limits? Know the maximum amount the insurance company will pay for covered losses. Many are under insured compared to the value of the property.
- What perils are covered? Inquire about the specific events or circumstances (such as fire, theft, or natural disasters) that the policy protects against. Is the main dwelling, other structures, and personal property covered under an open peril or named peril definition?
- Is the policy providing coverage for replacement cost (RC), actual cash value (ACV), or some other valuation? Are certain items covered for ACV and not RC? Your home maybe covered for replacement cost however a roof damaged in a hail storm maybe be covered for only ACV.
- Are there any exclusions? Learn about situations or types of damage that aren't covered by the policy and items that have sub-limits. Such as damage from a flood or theft of jewelry.
- What is the deductible? Understand the amount you'll need to pay out-of-pocket before your insurance coverage kicks in.
- Is there coverage for additional structures? If you have structures on your property like a detached garage or shed, confirm if they're covered and to what extent.
- Does the policy include liability coverage? Understand the level of liability protection provided in case someone is injured on your property and decides to sue. Is this just for premises only?
- Extended dwelling covered? Extended dwelling coverage is an optional coverage that can be added to a homeowners insurance policy. It provides additional protection beyond the standard dwelling coverage limit. This coverage is useful in scenarios where the cost to rebuild or repair your home exceeds the limit of your standard dwelling coverage due to factors like inflation, increased construction costs, or unique architectural features. Extended dwelling coverage ensures that you have adequate funds to rebuild or repair your home to its original condition in case of a covered loss, even if the cost exceeds the standard coverage limit.
- Code Coverage (or Ordinance or Law Coverage): Code coverage is another optional coverage that can be added to a homeowners insurance policy. It provides coverage for the additional expenses incurred to comply with building codes or ordinances when repairing or rebuilding a damaged home. Building codes and ordinances are updated regularly, and if your home is damaged, you may be required to make certain upgrades or modifications to comply with current codes. Code coverage helps cover the extra costs associated with these upgrades, ensuring that your home meets current building standards.
- What other coverages are available? Carriers may offer additional coverage for an additional premium (price) to cover damage from back up of sewage, coverage for service lines, personal injury coverage, and host of other coverages for things that are otherwise not covered, excluded, or limited.
Pricing is not the only difference between insurance quotes and policies. Often the differences are the coverages and deductibles. Having reduced coverages and/or higher deductibles often means higher out of pocket expense for the insured even for a covered claim or the incident is not covered.
Paying lower rate at the time of the policy could mean more out of pocket expense at the time of lose.
There are options that may help reduce cost of home insurance. Ask about potential discounts for features like security systems and smoke detectors. Bundling multiple policies such as an auto policy with the same carrier. Compare rates with multiple carriers keeping coverages similar. Even increasing the deductibles will assist in reducing cost without sacrificing coverage itself.
Talk with a licensed agent to review options that is best for you and your family.
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I spend my time in Oklahoma restaurants, not just on the phone. I talk with owners, managers, chefs, and bar leads. I’ve seen the back office, the dish pit, the walk-in, the patio heaters, and the POS that freezes at 6 pm. I know what really derails a week. My job is to match insurance to the way you run service, so one bad hour does not wreck your month. Here’s what matters and how it fits together. The Core Coverage You Cannot Skip General Liability Start here. A guest slips on rainwater near the host stand in Midtown. A kid bumps a space heater on the patio in Norman. A to-go order triggers a peanut allergy. General liability covers bodily injury and property damage you are legally responsible for. Most policies also include personal and advertising injury (things like defamation, slander, or copyright). Some carriers exclude or limit this—so confirm it’s included and not excluded on your policy. Important note: When you sell or serve alcohol as a business , standard CGL typically excludes liquor liability. That exposure is handled by a separate Liquor Liability policy . (More on this in Part 2.) Commercial Property Think building (if you own it) and everything inside that makes you money: hood systems, fryers, ovens, walk-ins, lowboys, POS, tables, chairs, bar stock, dish machine, signage, heaters, even that neon sign your photographer loves. This is Oklahoma—hail, wind, freezes, and long hot spells hit equipment hard. Property coverage is your repair/replace budget for major damage when a covered cause of loss strikes. Two details make or break your claim: Replacement Cost vs. Actual Cash Value (ACV): Replacement cost pays what it takes to buy new equipment today. ACV deducts depreciation, leaving you short. Confirm which your policy uses. Coinsurance: Many policies include a coinsurance clause. If you insure below true replacement value, claim payments may be reduced proportionally. Confirm your requirement. Don’t forget exterior signs . Freestanding or roof-mounted signs take wind hard in Oklahoma and often need to be scheduled with a real dollar amount. Business Income and Extra Expense Power goes out in Edmond on a Friday. You lose the prime rib for Saturday plus the sales you needed to cover payroll. Business income replaces lost net income and pays unavoidable expenses like rent, payroll, loan payments, and utilities. Extra expense covers costs to reopen faster—temporary refrigeration, a generator, rush parts. Ask for: Utility Service Interruption (off-premises power outage) Civil Authority (your street is blocked after a nearby fire/tornado) Equipment Breakdown Property insurance loves fire/wind/water—but not internal failure. Equipment breakdown covers sudden, accidental mechanical or electrical breakdowns: HVAC boards, compressors, dish machine controls, POS systems. It’s inexpensive and saves more claims than owners expect. Food Spoilage and Contamination Two related but different protections: Spoilage: Pays when food is lost due to outage or equipment failure. Contamination: Pays when health authorities require you to discard product or sanitize. Some carriers add PR/crisis response. Don’t guess your spoilage limit. Walk the cooler, total meats/seafood/dairy/produce/sauces/prep—and add a cushion for holidays or event weekends. Workers’ Compensation If you have employees, Oklahoma law generally requires workers’ comp. It covers medical costs and a portion of lost wages (cuts, burns, slips, strains) and protects you from most employee injury lawsuits. Owners/LLC members/family can often be included or excluded by election—check your filing. Lowering cost long-term: track hood cleanings/grease trap service and slip incidents; enforce non-slip shoes; train new hires on lifting. Carriers reward documentation. Common Mistakes to Avoid Low spoilage limits (don’t insure $2,000 if your walk-in can hold $8,000) No utility service coverage (outages are more common than fires) ACV instead of replacement cost Coinsurance penalties from underinsuring Assuming liquor liability is included (it usually isn’t for alcohol businesses) “Set and forget” workers’ comp payroll estimates (audit pain later) Ready for Part Two This post covers the backbone. In the next post, we’ll dig into liquor liability, hired/non-owned auto, cyber, EPLI, leases, and Oklahoma “gotchas.” Coverage needs and limits vary by operations and contracts. This article is educational only and does not guarantee coverage. Review your policy with a licensed independent agent. For a no-pressure review, call 405.733.2886 , email steven@conwayinsuranceok.com , or visit ConwayInsuranceOK.com .