You can save money by scaling down your policy, but be careful not to underinsure. There are two most common types of protection.
- Named Perils coverage provides coverage for specific basic perils outlined in the policy. This coverage is usually less expensive, but places more risk of financial loss on you.
- All Risks coverage provides broader coverage for normal risks to which your home is exposed, except those which are specifically excluded, such as acts of terrorism or flooding.
There are three general policy categories from which to choose:
- Basic/Named Perils policies which is the most basic policy you can buy, providing “Named Perils” coverage only for both your home/outbuildings and its contents.
- Broad Form policies provide slightly broader protection, offering “All Risks” coverage on your home and outbuildings and “Named Perils” coverage on your contents.
- Comprehensive policies provide the most thorough coverage available by offering “All Risks” coverage for your home/outbuildings and also your contents.
Regardless of which policy you select, some coverages can be increased and certain items insured separately. Your broker will be happy to sit down with you to review your coverage needs.