Protecting your biggest investment

What you should know about homeowners insurance

When you buy a home, your bank or mortgage company will require you to purchase homeowners insurance. Homeowners insurance helps protect you if your home ever gets damaged or destroyed by a fire, storm, or some other reasons. Here are some things to think about before you buy homeowners insurance:

  1. Your policy should cover the cost of completely rebuilding your home at current construction costs.
  2. You may only be required to purchase enough homeowners insurance to cover the cost of your mortgage. If that’s the case, you need to be sure you also have enough insurance to pay the cost of rebuilding your home.
  3. Every policy protects you in the event someone is injured on your property. Most policies provide you with at least $100,000 in liability coverage, but you should consider having at least $300,000 to $500,000.
  4. If you have other assets that are worth more than the largest amount of liability coverage included in your policy, consider purchasing an excess liability or umbrella policy to provide yourself with extra coverage. These policies are relatively inexpensive.
  5. You can protect yourself against rising construction costs by adding an inflation guard, which automatically adjusts when your policy is renewed.
  6. If you live in a flood zone, you’ll only be covered if you purchase a separate flood insurance policy.
  7. Even if you’ve paid off your mortgage, don’t cancel your homeowners insurance.

Ways to save money on homeowners insurance

When you shop for homeowners insurance, be sure to ask if doing any of these things will lower your premium.

  1. Increasing your deductible from $500 to $1,000.
  2. Installing smoke detectors, dead-bolt locks, or a burglar alarm. Sprinkler systems, fire alarms, and burglar alarms monitored by your fire department, police department, or home security company may lower the cost of your policy.
  3. Purchasing both your homeowners and auto insurance policy from the same company.
  4. Staying with the same insurer may result in a loyalty discount.

Your home is probably the largest purchase you’ll ever make. Having the right homeowners insurance can protect your most valuable asset.


Availability of products and coverages varies by carrier and state. Some products and coverages may not be available in all states.

Insurance issued by the Prudential Insurance Company of America, Newark, NJ, and its affiliates. Each is a Prudential Financial company that is solely responsible for its own financial condition and contractual obligations. Our policies contain exclusions, limitations, reduction and terms for keeping them in force. A licensed financial professional can provide you with complete details. The availability of other products and services varies by carrier and state. Prudential Financial, its affiliates, and other financial professionals do not render tax or legal advice. Be sure to consult with your personal tax and legal advisors.

0264149-00001-00