How to Read Your Homeowner's Policy Before You Need It

A homeowner's insurance policy is a forty-page legal document that almost no one reads until something goes wrong. After 26 years of advocating for clients in claim negotiations, here are the parts of your policy that matter most — and the questions to ask your agent before you need to.

Start with the declarations page

The declarations page ("dec page") is the one-page summary at the front of the policy. It lists your coverage limits, deductibles, endorsements, and named insureds. Most of what you need to know about your coverage in a hurry is on this page.

Coverage A: Dwelling

This is the maximum the policy will pay to repair or rebuild your home. Check it against current cost-to-rebuild estimates for your area. Underinsured dwelling coverage is the most common gap we see — homes valued at 2018 prices, insured at 2018 limits, in a 2026 cost environment.

Coverage B: Other Structures

Detached garages, sheds, fences, and outbuildings. Typically 10% of Coverage A. If you have a large detached shop or a high-value outbuilding, you may need a higher limit.

Coverage C: Personal Property

Contents — furniture, electronics, clothing, tools. Typically 50% to 70% of Coverage A. Sub-limits often apply to specific categories (jewelry, firearms, business property, fine art). If you have collections, schedule them separately.

Coverage D: Loss of Use

Pays for additional living expenses if your home is uninhabitable during repairs. Hotel, meals, pet boarding, laundry. Typically 20% to 30% of Coverage A. Significantly underused by most homeowners.

Deductibles — especially wind and hail

Standard policies typically carry a flat all-perils deductible ($1,000 to $5,000). Many policies in storm-prone regions including Missouri now carry a separate, percentage-based wind and hail deductible — usually 1% to 2% of the dwelling coverage.

If you have a percentage wind/hail deductible, deductible financing is a legitimate tool. We currently work with Acorn and Hearth for clients in the $1,500 to $9,000 range. Anyone offering to waive your deductible is breaking the law — that's insurance fraud, regardless of how it's framed.

ACV vs. RCV — and why it matters

ACV (Actual Cash Value) and RCV (Replacement Cost Value) are two different ways the policy calculates what it pays for damaged property.

ACV (Actual Cash Value)

Pays the depreciated value of the item. A 15-year-old roof on an ACV policy may pay only 40% to 60% of replacement cost. The remainder comes out of your pocket.

RCV (Replacement Cost Value)

Pays the cost to replace with like kind and quality. Usually paid in two parts: ACV first, then the depreciation "recoverable" amount once repairs are completed and documentation is submitted.

Most newer policies are RCV by default for the dwelling. Some carriers issue ACV-only policies on older roofs as a cost-savings option. Check your dec page or call your agent. The math difference on a typical roof claim is often $5,000 to $15,000.

Endorsements that limit contractor choice

In Missouri, the homeowner generally has the right to choose their contractor for restoration work. Some carriers offer a premium discount in exchange for an endorsement that restricts that choice to a carrier-approved network.

If you've signed such an endorsement, you've traded contractor freedom for monthly savings. There's nothing wrong with that — but you should know it before a storm hits and you find out your preferred local contractor isn't on the list. Ask your agent specifically: "Do I have any endorsements that limit my contractor choice?"

Common exclusions to verify

• Sewer/sump backup — usually requires a specific endorsement, not covered by default in most policies.
• Flood — entirely separate policy through NFIP or a private flood carrier. Rising water is not covered by your homeowner's policy.
• Earth movement — earthquakes, sinkholes, mudslides. Separate policy in most cases.
• Mold — many policies cap mold-related claims, often at $5,000 or $10,000.
• Wind/hail named-storm exclusions — less common in Missouri but worth checking.
• Roof age and condition — some carriers limit coverage on older roofs or roofs in poor condition.

The annual review

Set a calendar reminder to call your agent once a year — usually around renewal time — and walk through the dec page together. Confirm the dwelling coverage still reflects current rebuild costs. Confirm any endorsements you have. Ask if there are coverage gaps for risks specific to your home (sump pump, sewer line, older roof, large outbuildings).

The fifteen minutes you spend on that call once a year is the cheapest insurance you'll ever buy.