When shopping for homeowners insurance, it can feel like you’re searching for all the right puzzle pieces that will perfectly fit in your policy to protect your home and your family. And with so many optional coverages to choose from on top of the policy requirements, it can be hard to know exactly what you’ll need.
At Berry Insurance, we take pride in walking our clients through their home insurance policies, making recommendations on the areas their property will need additional coverage. Since every family and home is so varied, exact coverages and policies tend to vary - but we still find that most policies benefit from certain optional coverages you can add onto your home insurance policy.
Keep reading to learn all about what our team considers to be a few of the top coverages they recommend to homeowners and why you should have them on your policy.
1. Extended & Guaranteed Replacement Cost
Both extended and guaranteed replacement are optional endorsements available to add onto your policy that provides additional replacement cost value (RCV). RCV is included as a part of your home insurance policy, and is the cost to replace something as new or in equal value, reimbursing you based on how the value was determined by the insurance provider or what it was given on the policy.
Extended or additional replacement cost increases replacement cost coverage in the event that any covered damages result in costs that exceed your policy limits. This can be useful in cases when costs to repair or rebuild after damages or loss become more expensive than expected. For example, when supply and demand of building materials increases after a natural disaster affects multiple homes.
Similarly, guaranteed replacement cost grants additional coverage as an add-on to your existing policy, but instead has no cap on the additional funds.
Extended replacement cost extends your dwelling 25%, 50%, or 100% of the cost to rebuild your home. At Berry Insurance, our team typically recommends using 100% when available in order to cover any gap if your home is found to be underinsured.
For more on replacement cost, and how it differs from actual cash value, read this guide: Actual Cash Value vs. Replacement Cost.
2. Personal injury
Having personal injury protection on your policy will cover you if you are being sued for libel or slander, wrongful eviction, or wrongful entry and any associated legal costs.
Generally, we recommend policyholders opt for this coverage, as lawsuits can be costly - especially now with the emergence of online/social media defamation cases.
Thankfully, personal injury can be an affordable addition to any policy. You can typically expect a $1M personal injury endorsement to cost around $10 per year added to your existing home insurance policy .
Need to know more about personal injury coverage? Then head over to our breakdown of everything it offers and whether you need personal liability coverage as well: Personal Injury vs. Personal Liability Coverage: Do I Need Both?
3. Water backup
Water backup can be added onto your policy to cover water damage to your property caused by the backup of sewers, drains, or sump pump failures. This differs from water overflow, as backup occurs deeper within the pipes and plumbing system rather than just the drain.
Claims made for damages from backup are more common, and generally yield more damage than overflow.
Our team at Berry Insurance generally includes water backup coverage as a standard when we present quotes, as it is an important protection we often see claims for.
4. Service line coverage
Service lines refer to the underground utility lines that run under your property - including water and sewer pipes, power lines, phone/cable lines, natural gas pipes, and more. While these are an important part of any home, they are not typically covered within a standard homeowners insurance policy.
Instead, service line coverage can be added onto your policy to offer protection against any unexpected expenses that would result from the damage of service lines on your property - such as water pipes blocked by tree roots or cracked sewer lines.
This coverage would cover the costs of repairing or replacing utility lines, including any required costly excavation to access the broken lines and landscaping that may get damaged during the repairs.
Service line breaks can typically cost anywhere from $5,000 - $10,000, making this endorsement an important addition to your policy. Service line coverage usually costs around $50 per year for $10,000 to $20,000 of additional coverage - but overall cost and premiums would vary depending on the insurance carrier.
5. Home systems protection
With technology being such a big part of our lives and our homes, when our devices or systems break down it can be as inconvenient as it is expensive.
Having home systems protection on your policy helps to cover equipment and built-in systems in your home from sudden and accidental mechanical and electrical breakdowns. While warranties from appliances and electronics may only last a year or two, home systems protections provide additional protection after warranties expire.
This policy endorsement can cover everything from central air conditioning, kitchen and laundry appliances, security systems, home entertainment systems, medical equipment, and more.
As more electronics and appliances are becoming commonplace in our homes, having this endorsement can be a crucial add-on to your policy.
6. Ordinance or law coverage
Being a homeowner means you’re responsible for the safety of your home and all its residents. This makes it important for you to keep your property up-to-date on current building codes. Building codes can change all the time due to weather conditions, fire safety, wiring, plumbing, or handicap accessibility.
Since paying out of pocket for renovations to comply with new mandatory state codes can be expensive, ordinance or law coverage can be added onto your policy to help cover the increased costs to meet the codes after a covered loss. For example, having this coverage added onto your policy could cover the costs to upgrade your home's plumbing, heating, or electrical after suffering a covered claim.
Finding the right fit for your policy
And there you have it - our top recommendations on what optional endorsements you should consider adding onto your home insurance policy. With so many options to choose from when building your policy, now you know what areas you should be looking out for when working with your local insurance agent.
Interested in more information on what you should look out for as a homeowner? Then check out our guide on the most common home insurance claims, and what to do if they happen to you!
