Homeowners Insurance

Home Insurance Basics


street view of a modern homeHomeowner's insurance is a must for all homeowners, renters, condo and apartment dwellers for several reasons. Mortgage lenders require appropriate insurance coverage from mortgage borrowers as a form of asset protection in effect (ie without home insurance you will be denied mortgage approval).


Renters need insurance to protect their belongings. The contents of the home or apartment will not be covered if something happens to the building.

Standard Coverage

A standard homeowner's insurance policy provides coverage for the following:

  • Damages to the interior or exterior parts of the residential structures including the outlying structures like sheds and garages, if the policy so provides. The coverage applies only to damages brought by fire, lightning, hurricanes and vandalism, among other covered events. Unless otherwise stated on the contract, damages due to earthquakes, floods and poor home maintenance are not covered; a separate rider is necessary.
  • Losses or damages to personal belongings like clothes, jewelry and appliances. The amount for reimbursement usually has a limit, of which the industry standard is 50% to 70%, although homeowners and renters can also have coverage for the items full appraised values.
  • Personal liability for injuries and damages caused by the homeowner or any member of his family including pets. For example, if your dog bites your neighbor, your insurance company will pay for the medical expenses.
  • Rental expenses while the house is being repaired or rebuilt. The insurance company imposes a limit on the expenses so check the provisions before checking into the most luxurious hotel in the neighborhood.

The type of coverage of a homeowners insurance policy will partly depend on the premiums paid for it. The general rule is that the higher the premiums, the wider the coverage but it still pays to check the terms and conditions of the contract before making any assumptions.

Types of Coverage

Home insurance companies provide three levels of coverage or reimbursements in case of claims.

Actual Cash Value

Actual Cash Value equals the value of the belongings after depreciation is deducted.

Replacement Cost

Replacement cost refers to the actual value itself sans the depreciation deduction.

Guaranteed Replacement Cost

Guaranteed replacement cost is the most comprehensive since all the costs to repair or rebuild the residential structure are covered.


  • "I have been a customer of Farley Insurance since 1982. When I've had a claim they have been great to work with. They go to bat for me every year for the best rates which keeps me coming back. Very appreciative of Kent and his staff."

    — Penny

  • "My family has been with Farley Insurance Agency for 28 years. We enjoy their professional service they provide for our everyday needs as well as at claim time. Our claims have always been paid in a timely manner and their staff is very knowledgeable and helpful. They are truly 'only a call away'!"

    — Terri

  • "In November of 2015, we had a major fire which destroyed everything. We reopened in April of 2016 thanks to Farley Insurance. We could not have asked for better or more pleasant people to work with. They made everything run smoothly. We would recommend them to anyone. Thank you Farley Insurance!"

    — Nick

  • "We have used Farley Insurance Agency for a few years with a variety of business and personal coverage. Tim and his office has always been prompt and professional when dealing with any inquiries or issues that arise. We have found Tim to be competitive and has saved us money on insurance costs."

    — Mike

  • "Farley Insurance Agency has been Rex Vault's insurance provider for many years now. Both Tim and Chad have been excellent to work with. Their product knowledge is outstanding and their experience is always helpful."

    — Mark

  • "Tim Farley has been our agent for several years and we have been happy with his service and find him and his staff very helpful."

    "Insurance in the construction industry is competitive and we feel very comfortable with using the Farley agency."

    — Scott

  • "Farley Insurance Agency has been provides the business insurance for the City of Newton. Their product knowledge is outstanding and their experience is always helpful."

    — Mark