Homeowners Insurance 101

November 2023

Family and friends are celebrating with an outdoor gathering in the yard of a large house. A man grills, a group sits at a table, and children play.

Your home deserves the best protection.

Whether you’re shopping for new home insurance or reviewing your current policy, it’s important to understand the different types of coverage that are available so you can make the best decisions when it comes to protecting your home and valuables.

Here's our guide to the basics of homeowners insurance. Have questions, or want to talk coverage? Feel free to contact us or reach out to your local independent agent today.

Understanding the basics

A homeowners insurance policy covers sudden and accidental events that occur to your home, and acquiring a policy is typically required by a bank when you take out a mortgage on a home.

Most homeowners insurance policies cover the following:

Physical structures

This part of your homeowners insurance policy will cover damage or losses to your home and potentially other structures on your property like freestanding garages, sheds, and gazebos.

  • This typically covers repairs caused by fire, vandalism, lightning, and hail.
  • It’s important to check the specific events that your policy will cover—for example, some Mutual of Enumclaw policies automatically include coverage for sewer backup, but many insurance carriers do not offer this protection as part of their baseline coverage.

If you live in an area with an increased likelihood of natural disasters like earthquakes and flooding, you may want to explore additional coverage that specifically addresses those events.

Additional Living Expenses

If the damage done to your dwelling makes it uninhabitable, your homeowners insurance policy will also help with expenses related to living away from your home.

  • This could include covering temporary rental or hotel stays, restaurant bills, and sometimes even the cost of boarding your pets. 

Personal Property

In an event where the assets inside your home are stolen or damaged, your homeowners insurance policy can help recoup your losses. It’s a good idea to record an inventory of your belongings before an event happens—it will only make the claims process easier. Make sure to list items of value or significance like:

  • Electronics
  • Appliances
  • Jewelry
  • Furniture
  • Art
  • Tools
  • Collectibles

Mutual of Enumclaw tip:  An easy way to do this is to record a video walk-through of your home and take notes about your items and their estimated value. 

Liability Protection

Accidents happen. If someone gets injured at your home and you are held responsible, your homeowners insurance policy can help pay for legal expenses and medical costs to the injured party.

Another instance where your homeowners insurance policy can come into play is if you or a family member causes damage to another home—for example, if your child hits a baseball and it breaks a neighbor’s window, your homeowners insurance can help pay for repairs.

A young couple sits on the front deck of a cabin. The woman is working remotely on her computer while a man is playing guitar.

How it works if you have a claim

Actual Cash Value

This level of coverage replaces an item or your home at its actual cash value. Keep in mind that this level of coverage typically includes a deduction due to depreciation.

  • For example, if you bought a new laptop for $3,000 five years ago, it may now be worth $1,500 after five years of depreciation. If your laptop gets stolen under this policy, you will be reimbursed $1,500 for the actual cash value of the laptop, not $3,000. These policies are typically the most affordable option.

Replacement Cost

When you have a homeowners insurance policy that covers replacement costs, you would be reimbursed the cost of replacing or rebuilding your personal assets, without the deduction for depreciation.

  • In the case of the laptop above, you would receive $3,000 for a brand-new laptop to the replace one that was stolen.

Extended Replacement Cost

You also have the option to purchase extended dwelling coverage, which offers coverage of a certain percentage over the maximum limit of your policy.

  • Oftentimes, these policies will cover 20 to 50 percent over your policy limit to consider higher construction, labor, and material costs at the time of a rebuild.
  • Extended replacement policies offer the best financial protection against any large-scale disasters that can destroy your home. 

Talk to an agent

At Mutual of Enumclaw, we believe the right coverage starts with an independent agent. An agent is the best person to chat with in regard to protecting your home and belongings. They’ll understand the needs of your community and can guide you through selecting the best policy, filing a claim, and adjusting your policy as life events occur.

Explore the thoughtful coverage difference

We're here to help you protect all the things that are important to you. Learn more about Mutual of Enumclaw's coverage options for homeowners, renters, and condo owners.


The information we share on our site is intended to serve as a general overview. Please refer to your policy or contact your local independent agent for specific coverage details.


The Right Coverage Starts with an Independent Agent

Looking for confidence in your coverage selection? Do yourself a favor and work with an agent.

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