
First-Time Home Buyer Insurance Guide

First, we would like to congratulate you on becoming a homeowner!
In this first time home buyer insurance guide, we will break down the many elements of homeowners insurance, from introduction of the standard coverages to the things that are not covered in a standard policy.
We will also go over additional insurance options outside of standard homeowners policy, such as earthquake and flood insurance.
Last but not least, we will go over some commonly asked questions.
Let's get started!
CHAPTER 1:
Understanding Homeowners Insurance
What does homeowners insurance cover?
Your standard homeowners insurance policy consists of six main coverages:
Dwelling
Other Structures
Personal Liability
Personal Property
Medical Payment
Additional Living Expense

Dwelling
Dwelling includes the main structure of your home and other structures that are attached to it. Common examples of structures attached to a home are:
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More than just covering exterior structures, dwelling coverage may also include things that are inside of your home:
- Built-in appliances: furnace, water heater, etc.
- Permanent fixtures: countertops, kitchen cabinets, upgraded hardwood flooring, etc.
Other structures
Beyond your dwelling, there may be other buildings or structures within your property. Most common examples of these structures are:
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These structures are covered within the verbiage of your insurance documents, which includes how the insurance company estimates claim payout in the event of a covered claim.
Personal liability
Personal liability coverage protects you, the homeowner, in the event of an accident inside or outside of your home. The coverage provides financial protection for:
- Lawsuits relating to the accident
- Injury to the individual(s)
- Property damage as result of the accident
This coverage even extends to your pets and will cover costs of injuries or damages caused by your pets including dog bites.
Learn more about personal liability coverage.
Personal property
Exactly like its name, personal property coverage provides financial protection for all of your personal belongings. Here is a list of the most common examples:
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Note: High value personal items such as jewelry, guns, cash, and business properties have coverage limits and may require additional endorsement to be adequately insured for their value.
Learn more about personal property coverage.
Additional living expense
Also known as loss of use coverage, this coverage can help you and your family with temporary housing costs and extra meal expenses in a covered claim.
Here is a list of the most common applications for this coverage:
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The amount of coverage is typically between 20% to 30% of your homeowners dwelling coverage, and most insurance companies do not have deductible for this coverage.
Learn more about additional living expense coverage.
Medical payment
Simply known as "Med Pay," this coverage is designed specifically to cover the cost of medical expenses for any injuries your guests sustained while they are visiting your home.
Med pay offers some distinctive benefits that are different than other types of liability insurance:
- There is no deductible.
- Does not require determination of responsibility.
- Will make payout right away.
Learn more about medical payment coverage.


Coverage limits and deductibles
Coverage limits
Dwelling coverage is the main coverage that determines your homeowners insurance coverage limits. It is also the baseline that is used to determine coverage limits of other coverages such as personal property and loss of use.
Here is an example where the dwelling coverage is set at $500,000:
Dwelling Coverage
$500,000
Personal Property Coverage
$250,000
50% of dwelling coverage
Loss of Use Coverage
$125,000
25% of dwelling coverage
How is the dwelling coverage limit established?
The main factor that determines your dwelling coverage is your home replacement cost.
Home replacement cost is the total estimated cost including labor and material to rebuild your home back to its original condition prior to a claim.
There are several main factors used to determine home replacement cost:
- Building info - year built, square footage, etc.
- Exterior features - exterior wall material, age of roof, etc.
- Interior features - number of bathrooms and kitchens, type of interior flooring, etc.
How is home replacement cost different than home sales price?
Home sales price is the market price of your property including both value of the land and value of any improvements on the land, such as your home, landscaping, or other features.
Home replacement cost on your insurance policy is the estimated cost including labor and material to rebuild your home back to its original condition prior to an insurance claim.
Deductible options
A deductible is your out-of-pocket expense before a claim payout is made by your insurance company. Most insurance companies offer fixed deductible options ranging from $500 to $10,000 for homeowners policies.
Some companies may even offer a percentage deductible from 0.5% to 3%. A percentage deductible is calculated using the percentage of the dwelling coverage amount listed on the policy at the time of a loss.
A quick example:
$500,000 dwelling coverage with 1% deductible:
Dwelling Coverage
Deductible
In this example, the homeowners will have to pay $5,000 out-of-pocket expense before a claim payout is made by their insurance company.
How is home replacement cost different than home sales price?
In our experience, the most common deductibles chosen are between $1,000 and $5,000.
As a general rule of thumb, you will see a lower premium for a percentage deductible compared to a fixed deductible option.
Keep in mind, because the deductible is calculated based on the percentage of dwelling coverage, any change or adjustment to the dwelling coverage will result in a shift in your deductible amount.
With the inflation adjustment built into your policy, the dwelling coverage will automatically adjust upwards annually at renewal. As a result, you will see your deductible vary from year to year.
On the other hand, a fixed deductible will remain the same regardless of any changes made to the policy.
Optional coverages to consider
Business Property
Identity Theft Restoration
Yard and Garden
Green Improvement
Music Instrument
Electronic Data Recovery
Sports Equipment
Scheduled Personal Property
Building Codes
Water Backup

Business Property
Property that is mainly used for the purpose of conducting business. Coverage could include computer equipment such as a work laptop or any business inventory you store at home.
Identity Theft Restoration
This coverage provides reimbursement to expenses incurred as a direct result of identity theft.
Examples of services and coverage limits under this policy:
- Expenses to retain professional services to assist and address the effects of identity theft: $2,000 limit.
- Lost wages as result of taking time off from work to handle the identity theft issues: $250 max per day, up to $5,000 combined.
- Attorney fees in case of any lawsuits against you from collection agencies.
- Other miscellaneous expenses relating to correspondences needed to resolve the issue relating to identity theft restoration.
Sports Equipment
High value golf set, ski, treadmill, scuba diving gear, climbing gear, etc.
Most standard homeowners insurance will include coverage of these equipment, but may have limitations when it comes to theft. There may also be coverage limits to high-value equipment and may require additional scheduled personal property coverage to properly insure them.
Green Improvement
Green improvement coverage will provide replacement cost of covered property that performs a similar function and is more energy efficient as identified by the Energy Star* label.
Qualified items are Energy Star labeled products from one of these home categories:
- Appliances, computers, and electronics
- Heating and cooling equipments
- Lighting and fans
- Plumbing
*Energy Star is the government-backed symbol for energy efficiency.
Yard and Garden
Yard and garden coverage provides financial protection up to a predetermined amount for any single tree, shrub, or plant, and it includes cost to remove debris after a covered loss.
Typically the coverage amount is $1,000 per item.
This coverage only applies to sudden and accidental direct physical loss caused by covered perils such as fire, vandalism or theft.
Electronic Data Recovery
Electronic data recovery coverage will cover expenses incurred for hiring of a recovery firm for lost electronic data.
This coverage will only apply if the loss is resulted from:
- Sudden and accidental direct physical loss to the equipment.
- Vandalism or malicious mischief that corrupts, harms the system including a computer virus.
Music Instruments
Guitar, violin, clarinet, saxophone, cello, etc.
Note: piano may be considered a furniture piece due to its lack of mobility, check with your insurance agent for more information.
Most standard homeowners insurance will include coverage of these instruments, but may have limitations when it comes to theft. There may also be coverage limits to high-value instruments and may require additional scheduled personal property coverage to adequately cover them.
Water Backup
Just like its name, water backup coverage protects your home in the event that water backs up from your sewer line, such as overflowing of toilet due to a clogged sewer line. In addition to sewer line backup, it provides coverage for water damage as result of sump pump overflow or failure.
What benefits are included in the coverage?
First and foremost, this coverage will pay for emergency and temporary repair to mitigate further damage to your home. After mitigating the damage, the coverage will reimburse you for:
- Debris removal
- Restoration
- Repair or replacement of damaged property within your dwelling
- Additional living expense
Keep in mind that the amount of benefits must fall within the coverage limit and that there is typically a deductible for this coverage.
In-depth article: Water Backup Coverage .
Scheduled Personal Property
Standard homeowners insurance includes coverage for your personal property, but there are specific coverage limits for high-value items such as jewelries and antiques.
In order to adequately cover these valuables, you can add a scheduled personal property endorsement onto your homeowners policy. A scheduled personal property endorsement allows itemization of your valuables at their recent appraised value, so you are not limited to the standard limits of homeowners insurance.
In-depth article: Scheduled Personal Property .
Building Codes
After a covered loss, the Building Codes coverage will cover any increased cost incurred due to compliance with local building codes during a repair or rebuild of your home.
Additional demolition cost to meet local guidelines and regulations is also included in this coverage.
CHAPTER 3:
Things That Are Not Covered By Homeowners Insurance
What are insurance exclusions?
Most of the risks that are not covered by insurance companies fall into the following categories of reasons:
Maintenance Related Concerns
Unlawful Events
Coverage Exists Elsewhere
Catastrophic Events
- Maintenance related concerns: Most insurance companies will consider damages that are the result of a customer's failure to properly maintain or repair an insured property as the customer's own responsibility.
- Coverage exists elsewhere: Scenarios such as damaged cars as result of a house fire will be covered under an auto policy, not homeowners policy.
- Unlawful events: Most policies exclude incidents that are illegal or criminal by nature. These incidents may include intentional acts by a homeowner that cause damage to the home.
- Catastrophic events: Major disasters such as a nuclear incident, war related damages, earthquake, or flood are excluded in a standard homeowners policy.
In the next sections, we will go over some common examples of insurance exclusions as well as specific scenarios that are likely excluded in your homeowners insurance coverages.
As always, we strongly recommend discussing your insurance coverages with a dependable agent to make sure you are properly and adequately protected.
Common insurance exclusions
List of the common insurance exclusions:
Earthquake
Flood
Mold
Wear & Tear
Neglect
Insect & Vermin Infestations
Intentional Damage
Nuclear Damage
Acts of War
Acts of Government
Note: Earthquake and flood can be covered by supplementing homeowners insurance with additional insurance. For more information, we will be going over them in the next chapter.

Insurance exclusions scenarios
Construction Defects
Construction defects are the result of poor workmanship by builders or contractors who were hired as part of the initial construction of the home or subsequent remodeling.
In many instances, construction defects are discovered by a licensed home inspector during the process of a real estate transaction. An inspector has thorough professional knowledge and experience to properly identify construction defects or poor workmanship.
In other instances, construction defects are revealed after the homeowner reports damage and it has been assessed by a professional like a plumber or another contractor.
How to avoid construction defects?
The best way to avoid finding yourself in this situation is to only select reputable contractors with a long working history of successful home projects. It is vital to do the proper research on your contractors and verify they are properly licensed and bonded for your projects.
In-depth article: Construction Defects .
Water Main Breaks
Water mains are large underground service lines that transport water from municipal water supply systems to residential homes and businesses. A single water main can transport enough water for an entire city block.
Due to the enormous amount of water it carries, a water main break can wreak havoc to an area similar to what a flood could.
Should I be concern of water main breaks in my neighborhood?
According to the United States Environmental Protection Agency, there are approximately 240,000 water main breaks every year in the United States.
Many of the water mains in older neighborhoods were installed more than 50 years ago, and some were more than a century ago. In most of these water mains, materials used in the construction are likely near the end of their effective life and highly susceptible to breakage.
Why is water main break excluded in homeowners insurance coverage?
When it comes to water-related damages in your home, the cause of the damages is essential in determining insurance coverage.
Most standard homeowners insurance provides coverage for sudden and accidental damages for water that originated from within your dwelling, such as pipe bursts in the kitchen or toilet overflows.
In the case of a water main break, the source originates from the municipal water supply system that is on public land and shared by everyone in your neighborhood. Water main is considered an external source to homeowners property, and therefore homeowners insurance will not cover water damage as result of a water main break.
Does flood insurance cover water main breaks?
Flood insurance covers water damage originated from external sources to homeowners’ properties, such as Mother Nature, neighbor's above-ground swimming pool, and in this case, water main breaks.
If you live in an older neighborhood that could possibly have an aging water main, it may be a good idea to look into adding flood insurance to your insurance portfolio.
In-depth article: Water Main Break .
CHAPTER 4:
Additional Insurance Beyond Homeowners Insurance
Do I need additional insurance coverages?
There are two natural disasters that are commonly excluded in your standard homeowners insurance policy:
Earthquake
Flood
Earthquakes are very common in many parts of the United States, especially along the West Coast. Here in the Pacific Northwest, we are vulnerable to potential major earthquakes as we are right next to an area known as the Cascadia subduction zone.
Flooding can be a frequent occurrence as part of the natural phenomenon of seasonal changes for many people living near a river, lake, or coastal front. However, risk of flooding exists for those who live further inland as well, especially in developed residential areas where large amounts of water has nowhere to recede.
In this chapter, we will go over coverages of both earthquake insurance and flood insurance.


Earthquake insurance
What are covered in earthquake insurance?
Similar to homeowners insurance, earthquake insurance provides financial protection for all of the major elements of your home and property with these coverages:
Dwelling
Other Structures
Personal Property
Loss of Use
- Dwelling coverage includes reconstruction of your home and all other structures attached to the house, i.e. attached garage, backyard deck, front porch, roof, etc.
- Other structures coverage includes reconstruction of any detached structures that are not directly attached to the house, i.e. storage shack, fence, detached garage, greenhouse, etc.
- Personal property coverage provides protection for all of your belongings such as your furniture, electronics, clothing, shoes, etc. Keep in mind that most insurance companies place a limit on valuables such as jewelry, watches, fine arts and other collectibles.
- Loss of use coverage will help pay for additional expenses such as temporary housing, food, moving cost, etc., in the event that your home is under repair or reconstruction.
Choosing coverage limits for earthquake insurance.
Most earthquake insurance companies allow you to choose your dwelling protection limit from a coverage range determined from your home replacement cost estimate. The same companies may also allow you to choose a specified limit to other structures or personal property coverage. Other companies have a fixed limit for all the above stated coverages with no options.
Other features included in your earthquake insurance
In addition to the main coverages listed above, earthquake insurance policies also include the following features:
Debris Removal
Engineering & Demolition Cost
Building Code Upgrade
Loss Assessment
- Debris removal covers the cost of clearing and removing debris from your property after an earthquake. However, this may not cover the cost to extract pollutants from the soil or water around your property.
- Engineering and demolition cost covers the cost to engineer and rebuild the home, as well as the cost to demolish structures that are unfit or unsafe on your property for rebuild.
- Building code upgrade covers the cost of following local city regulations for repair or rebuilding of your home. The coverage limit is specified on your policy (e.g. $10,000) and it is most applicable to older homes in areas like electrical and plumbing.
- Loss assessment covers the cost assessed to you as a home or condo owner to rebuild or repair any common or shared areas within the home or condo association.
How much does earthquake insurance cost?
The primary cost of your earthquake insurance will be determined by these major factors:
Type of Home
Foundation of Home
Age of Home
Framing Construction of Home
Cost to Rebuild the Home
Earthquake Territory Rating
- Type of home. Do you own a single family home or a duplex? Most residential earthquake insurance policies provide coverage for homes up to a fourplex.
- Foundation of home. Does your home have a basement or crawlspace? Your earthquake insurance premium will vary depending on the type of foundation.
- Age of home. Depending on the age of your home, local building codes may have updated significantly since the home was built, such as how the foundation is secured.
- Framing construction of home. Homes that are built with 100% wood or metal framing can easily secure an earthquake insurance policy. However, if your home has some percentage of brick or stone veneer, you may need to answer additional questions when obtaining a quote.
- Cost to rebuild the home, also known as replacement cost. The amount of your premium will correlate with the cost to rebuild your home: higher the cost, higher the premium.
- Earthquake territory rating. Here in the Greater Seattle area, we are located in the middle of a high risk earthquake zone, and our cost to obtain earthquake insurance will reflect that risk.

Adding earthquake insurance to your homeowners policy
Earthquake insurance endorsement
Some homeowners insurance companies offer earthquake coverage as an endorsement, and homeowners can elect to add this endorsement on to their policy for an additional premium.
If your home is older than a specified age requirement, you may need to meet additional requirements before you are able to add the endorsement even if your home is already insured under an existing homeowners policy. These requirements may include retrofitting your home such as bolting down the frame of your house into the foundation and securing other structural elements within your home.
Separate earthquake insurance policy
In most cases, homeowners purchase separate earthquake insurance policy from a specialized earthquake insurance company.

Flood insurance
Common causes of flood damage
According to the National Flood Insurance Program (NFIP), flood is an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.
For many people living near a river, lake, or coastal front, flooding can be a frequent occurrence as part of the natural phenomenon of seasonal changes.
However, risk of flooding exists for those who live further inland as well, especially in developed residential areas where large amounts of water have nowhere to recede.
Below are some common causes for flooding that are not exclusive to flood zones:
Heavy rain or downpours
Ruptured water mains
River overflowing
Dam or levee breaks
Storm surge or tsunamis
Melting ice & snow
Understanding flood zones and risks
FEMA has developed an official map called Flood Insurance Rate Map (FIRM) that displays different flood risk zones and high risk flood areas known as Special Flood Hazard Areas (SFHA).
To find out if your home is in SFHA or other flood risk zones, you may enter your address in the FEMA website: https://msc.fema.gov/portal/search .
Note that more information will only show under the displayed map if your home is located in a flood risk zone.
High Risk Areas
Moderate to Low Risk Areas
High risk areas
Zones that are designed in letters starting with A or V are SFHA .
If your home is located in SFHA, your mortgage lender will require you to have flood insurance. In the process of obtaining flood insurance, you will be asked to provide a document called Elevation Certificate.
Elevation Certificate is an official standardized NFIP form that documents important details of your home including various measurements of your house. This document can only be completed by a licensed professional land surveyor or engineer.
Before spending money to complete the certificate, there are a few ways to check if an existing certificate is already available:
- Contact your city to see if there is already an Elevation Certificate available for your address.
- Check with the seller, builder, or developer to see if there is already a copy on file.
- Look in your property deed. In many cases, the certificate is already included as part of the deed.
Moderate to low risk areas
Zones that are designated in letters starting with B, C, and X are moderate to minimal flood risk areas .
Homes that are located in these areas typically are not required to carry flood insurance by mortgage lenders.
What is covered by flood insurance?
Flood insurance policies are regulated by NFIP and the coverage options on these policies do not vary with different insurance companies. There are two types of coverage in flood insurance:
Building Coverage
Contents Coverage
Building coverage offers protection for:
- Electrical and plumbing systems
- Furnaces and water heaters
- Refrigerators, cooking stoves, and built-in appliances like dishwashers
- Permanently installed carpeting
- Permanently installed cabinets, paneling, and bookcases
- Window blinds
- Foundation walls, anchorage systems, and staircases.
- Detached garages
- Fuel tanks, well water tanks and pumps, and solar energy equipment
Contents coverage offers protection for:
- Personal belongings such as clothing, furniture, and electronic equipment
- Curtains
- Washer and dryer
- Portable and window air conditioners
- Microwave oven
- Carpets not included in building coverage (e.g., carpet installed over wood floors)
- Valuable items such as original artwork and furs (up to $2,500)
What are not covered by flood insurance
According to the NFIP website , these items are not covered by building or contents coverage:
- Temporary housing and additional living expenses incurred while the building is being repaired or is unable to be occupied
- Property outside of an insured building. For example, landscaping, wells, septic systems, decks and patios, fences, seawalls, hot tubs, and swimming pools
- Financial losses caused by business interruption
- Currency, precious metals, stock certificates and other valuable papers
- Cars and most self-propelled vehicles, including their parts
- Personal property kept in basements
Where do I get flood insurance?
There are more than 50 insurance companies across the country that are approved providers in the NFIP flood insurance program.
Most insurance agents have access to the flood program and can provide information and quote to be included during the home closing process.
If you prefer, you may also use this search tool provided by NFIP to find a flood insurance provider: https://www.floodsmart.gov/index.php/flood-insurance/providers .
CHAPTER 5:
Understanding Condo Insurance

Do I need condo insurance?
In many cases, to cover your own personal items and insure the structures inside of your unit, the answer is yes.
A condo insurance policy, also commonly known as HO6 insurance, is the property and liability insurance that supplements the condo association insurance and focuses solely to protect you, the unit owner.
Here is an example: Your upstairs neighbors went on vacation and the water pipes connected to their washer had burst. Water flooded their unit, the public hallway areas, and your unit right below it.
In this scenario, your condo association insurance will only cover the repair to the public hallway areas, and you will need to make a claim with your personal condo insurance to cover the damages to your unit.

What is a condo association insurance and what does it cover?
Condo association insurance, or more commonly known as condo master insurance, is the policy that your condo association has in place to cover the building, all of the common areas, and other shared spaces.
Different types of master condo insurance
Most condo master insurance policies break down into two types:
Bare Walls-In
All-In
- Bare walls-in: This policy provides coverage for the building structures such as roofing, framing, and insulation. It also insures common areas such as walkways, parking lots, gym, and other shared spaces. This is one of the more common types of condo master insurance.
- All-in: This policy extends the coverage of bare walls-in policy to include individual unit fixtures and built-in appliances. Common examples of kitchen cabinets, countertops, dishwasher, etc., are included as part of the coverage.
There is also a much less common type of condo master policy that does not include coverage for structure of the building. This policy only includes coverage for the common areas such as walkways, parking lots, and other shared spaces.
If you found out that your condo association carries this type of master policy, you would actually need to talk to your insurance agent about getting a homeowners policy to cover the entire structure of your home.

What does individual condo insurance cover?
Unit Interior
Personal Property
Personal Liability
Medical Payment
Loss of Use
Loss Assessment
Unit Interior Coverage
Unit interior coverage encompasses the flooring, electrical fixtures, built-in cabinets, appliances, and any part of your unit that is attached to the wall. This coverage along with the condo master insurance will essentially cover everything you see that first day before you move in.
Personal Property Coverage
Exactly like its name, personal property coverage provides financial protection for all of your personal belongings. Here is a list of the most common examples:
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Note: High value personal items such as jewelry, guns, cash, and business properties have coverage limits and may require additional endorsement to be adequately insured for their value.
In-depth article: Personal Property Coverage .
Personal Liability Coverage
Personal liability coverage protects you, the homeowner, in the event of an accident inside or outside of your home. The coverage provides financial protection for:
- Lawsuits relating to the accident
- Injury to the individual(s)
- Property damage as result of the accident
This coverage even extends to your pets and will cover costs of injuries or damages caused by your pets including dog bites.
In-depth article: Personal Liability Coverage .
Medical Payment Coverage
Simply known as "Med Pay," this coverage is designed specifically to cover the cost of medical expenses for any injuries your guests sustained while they are visiting your home.
Med pay offers some distinctive benefits that are different than other types of liability insurance:
- There is no deductible.
- Does not require determination of responsibility.
- Will make payout right away.
In-depth article: Medical Payment Coverage .
Loss of Use Coverage
Also known as additional living expense coverage, this coverage can help you and your family with temporary housing costs and extra meal expenses in a covered claim.
Here is a list of the most common applications for loss of use coverage:
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The amount of coverage is typically between 20% to 30% of your homeowners dwelling coverage, and most insurance companies do not have deductible for this coverage.
In-depth article: Additional Living Expense Coverage .
Loss Assessment Coverage
Loss assessment coverage most commonly applies to situations where the damages to public space within your condo community are not covered by the condo master policy or if the coverage has been exhausted.
This coverage will pay for the rebuild or repair costs that are assessed to you as an individual unit condo owner.

Does the breed of your dog affect insurance?
One of the main coverages included in your homeowners policy is personal liability coverage . This coverage is designed to protect you in the event that you are found liable for bodily harm or property damage to a third party.
Personal liability coverage extends to your immediate family and your pet, especially your dog. According to the Insurance Information Institute , there were nearly 18,000 dog bite claims in 2019 and the average payout for a dog bite claim was $44,760. Dog bite claims remain as one of the top personal liability insurance claims year after year in the United States.
If your dog bites another person or dog, the personal liability coverage in your homeowners insurance policy will be the coverage used to pay for any related medical expenses.
Given the statistical risk of dog bites, many insurance companies have specific guidelines regarding the breed of dogs in homeowners insurance policy. The most common breed restrictions are:
- Akita
- Alaskan Malamute
- Chow Chow
- Doberman Pinscher
- German Shepherd
- Pit Bull
- Rottweiler
- Siberian Husky
- Wolf Hybrid
Depending on the insurance company, there may be an increase in homeowners insurance premium if an insured household has a dog from any of the breeds listed above.
In some extreme cases, insurance companies may even decline an application for homeowners insurance because of the dog breed.
If you are looking to add a new furry friend to your family, we strongly recommend speaking to your insurance agent beforehand to find out if your homeowners policy has any dog breed restriction.

What’s the difference between renters and homeowners insurance?
Renters insurance is a type of property insurance policy you purchase when you are renting an apartment unit or a house. This insurance is often required by the landlord when signing a lease agreement.
Homeowners insurance, on the other hand, is the policy you purchase when you own your own home. This policy is always required by a mortgage lender during the home purchase process.
Difference in coverages
There are actually several coverages that are mirrored in both renters and homeowners policies: liability, additional living expense, personal property protection, and guest medical payment.
The major difference in coverages is that a renters policy does not need to carry coverage for dwelling or anything related to the building structure.
Homeowners
Dwelling Coverage
Dwelling
Coverage
Renters
No Property Coverage
Difference in deductible
Another difference is in the deductible - most renters policies carry deductibles ranging between $250 to $500, whereas most homeowners policies carry deductibles in the range between $1,000 to $5,000.
Difference in premium
The main component that determines the cost of homeowners insurance is its dwelling coverage. In comparison to renters insurance without any dwelling coverage, premium for homeowners insurance will be significantly higher.
According to the data listed on Insurance Information Institute , the average renters insurance premium nationwide in 2017 was $180 v.s. the average homeowners insurance premium of $1,211 during the same year.