Optional Extra Coverage Homeowners May Purchase
Extra Contents Coverage
Most coverages are a flat percentage of the amount of insurance on the home itself. For example: contents coverage is 50% of the insurance on the home itself. For a minimal extra charge, you can increase the coverage on your contents without increasing the amount of insurance on the home itself.
Guaranteed Replacement Cost Coverage
Most companies offer "Guaranteed Replacement Cost Coverage" for an additional premium. Ask your agent if this is available and to explain the advantages of having this broader coverage. The most important coverage normally offered is full replacement cost coverage on your roof with no deduction for depreciation.
Personal Property Extensions of Coverage
Another good example concerns special limits on certain types of personal property. For instance, most policies limit their coverage for the theft of furs or jewelry to $500 and for firearms or computers, the limit is $1000. Numerous other items are also typically limited to $500 or $1000 since the homeowners program is designed to fit the coverage needs of the average insured. It is the consumer's responsibility to review the limitations placed on certain types of property. If needed, increase the coverage of one area or another by adding a "Scheduled Personal Property Endorsement" to the basic policy.
You can also purchase additional liability coverage and medical payments coverage, for a nominal premium.
Another important area for additional coverage that might be desirable concerns the principal exclusions in a home owners policy. Even the broadest home owner's policy includes a few standard exclusions and the more important are against losses caused by floods and earthquakes.
The most important exclusion is flood, as many people have learned to their great misfortune. If you need flood coverage, any property/casualty insurance agent can help you get it. If you live in a flood prone community, don't risk going without flood insurance. See your broker about flood coverage.
No standard insurance policy, including the home owner's policy, covers catastrophic damage that can be caused by an earthquake. For an additional premium, companies offer an earthquake endorsement with your home owner's policy that will protect you in case your home suffers earthquake damage. In South Dakota, this coverage is typically inexpensive and should be considered. The New Madrid fault runs through the Midwest United States including parts of South Dakota.