Homeowners Insurance Basics

What a standard HO-3 policy covers

Most single-family policies are 'HO-3' and bundle several coverages. Know what each part does:

• Dwelling — rebuilding the structure itself (this should reflect rebuild cost, not your purchase price or land value).
• Other structures — fences, a detached garage, a shed.
• Personal property — your belongings, usually a percentage of the dwelling amount.
• Liability — if someone is injured on your property or you cause damage to others.
• Loss of use — living expenses if your home is uninhabitable after a covered loss.

Replacement cost vs. actual cash value — choose replacement cost

Replacement cost pays to rebuild or replace without deducting for depreciation. Actual cash value (ACV) subtracts depreciation, so a 12-year-old roof pays out as a 12-year-old roof — a much smaller check. Replacement cost costs a little more in premium and is almost always worth it. Confirm your dwelling coverage equals the cost to rebuild today, which in this market's labor and materials environment is often higher than people expect.

Deductibles, premiums, and what moves the price

A higher deductible lowers your premium but means more out-of-pocket per claim — pick a deductible you could actually cover tomorrow. Insurers also price on the home's age, roof condition and age, wiring/plumbing, distance to a fire station, and your claims history (filing small claims can raise future premiums, so reserve insurance for big losses).

Puget Sound: what's NOT covered by default

This is the part that matters most here. Standard policies exclude earthquakes and floods — and Seattle sits in the Cascadia subduction zone, one of the country's most significant earthquake risks. Many owners add a separate earthquake endorsement (it carries its own, larger deductible, often a percentage of the dwelling value). Flood coverage is also separate, usually via the National Flood Insurance Program (NFIP) or a private policy — required if you're in a mapped flood zone, and worth considering near rivers, lakes, or low-lying areas even if you're not.

• Earthquake endorsement — strongly worth pricing given Cascadia risk; expect a percentage-based deductible.
• Flood policy (NFIP/private) — separate from your homeowners policy; check the flood map for the address.
• Sewer/water backup and service-line coverage — cheap add-ons that cover common, expensive surprises.

How to shop it

Get 3 quotes for identical coverage (same dwelling amount, same deductible) so you're comparing the same thing. Bundling home and auto with one carrier often cuts both premiums. Lock the policy a couple of weeks before closing — the first year's premium is part of your closing costs, so you'll want it set.