Decoding Homeowners Insurance: Top Terms for First-Timers

Important Terms to Know as a Homeowner


You’ve saved your hard-earned dollars for years, and now you’re finally ready to put down a sizeable deposit on a property. You’ve searched the market and finally, you’ve found a home that you could see yourself living in. The process of making the biggest investment of your life can be complex and intimidating, but your search is over. Now, you need to care for that investment – and that means more than just repainting and changing the locks. Homeowners insurance in Red Hook, NY helps to protect your property and investment. To help you better understand coverage, here are some important terms to know.



The deductible is the way policyholders and insurers share the cost of coverage. A deductible is an amount that you pay in the event of a claim before coverage kicks in. Generally, a higher deductible means lower monthly premiums, but a higher out-of-pocket responsibility in the case of a claim.


Liability Insurance

Your home insurance policy will have a liability section that protects you and your family from legal claims that result from injuries that occur on your property. Liability also covers the medical costs and compensation for these damages, as well as legal fees for your defense.


Dwelling Protection

This cover protects the nuts and bolts of your home as well as the components that are actually attached, from carpeting and fireplaces to garages and decks. If these areas are damaged by a fire or storm, you can turn to your policy to help you repair them.


Actual Cash Value (ACV)

This is the actual cash value of lost or damaged property at the time of loss or damage. Keep in mind that this value takes depreciation into account.


Replacement Cost

This is the cost of replacing damaged or lost property at the current market value, not taking into consideration depreciation. This type of coverage better protects your items so that they can be replaced with items of similar quality.


Additional Living Expense

If something happens to your home that makes it uninhabitable while repairs are in progress, this coverage will pay for your temporary housing, additional transportation costs, laundromat fees, and even pet boarding. Depending on your needs and the needs of your family, a daily allowance will be established.


When you’re looking for homeowners insurance, contact your insurance professionals at Kneller Agency. Our dedicated experts are ready to assist you with all your home insurance needs.

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