Buying home insurance, in the order the decisions arrive

Home insurance is one contract over an owner-occupied dwelling, the belongings inside it and the liability the household carries, priced from four answers. Which perils it actually reaches is what a homeowners insurance policy grants and then subtracts.

This product is shopped backwards. People open on the premium and reach the dwelling limit last, which is the wrong end of the chain: the dwelling limit is the figure the premium is computed from, and in the standard form other limits are written as a percentage of it.

The four below arrive in the order a call asks them. The state regulators' 2023 shopping tool gives the rule that depends on that order: three quotes at least, and the same coverages and limits given to every company.

The four decisions

A	How much dwelling coverageCoverage A is the cost to rebuild at current construction prices, not the purchase price. In the 2022 edition of the standard form the other-structures limit is written in at ten percent of it.
B	Which deductible structureA flat deductible is a dollar figure. A percentage deductible is computed from Coverage A, so it is the same figure whether the storm took three shingles or the whole roof.
C	Replacement cost or actual cash valueAsked three times rather than once: for the dwelling, for the personal property, and separately for the roof. A state regulator worksheet created in September 2023 gives each its own line.
D	Which endorsements to buyAn endorsement amends the contract without reissuing it, and each is a form number that adds back something the base policy took out.

Decision one: the dwelling limit, and what it measures

Three numbers get confused here and one of them belongs on the quote. Purchase price includes the land and the location. Market value tracks what buyers will pay. Replacement cost is labor, materials, demolition and code-compliant reconstruction, priced at the moment of the loss. On an expensive lot it sits below the purchase price; on an old house in a soft market it sits above.

Then the threshold. That standard form has a designation, HO-3, and in its 2022 edition a building settles at replacement cost only where the insured amount is at least eighty percent of full replacement cost at the time of the loss; under that, settlement drops to the greater of actual cash value or a proportional share. It bites on partial losses, which are nearly all losses.

The estimate behind the limit is usually a closed box. Since 1 January 2025 Colorado has required the insurer to provide the reconstruction-cost estimate and to disclose how it was calculated. The same two questions work anywhere: what is the estimate, and what was it built from.

Decision two: the deductible structure, not just the number

A percentage deductible is not a percentage of the damage. It is a percentage of Coverage A, defined in the 2026 homeowners data call as a specified maximum percentage of the policy total Coverage A amount, and it does not shrink because the loss was small.

The second question is what fires it. A hurricane deductible needs a storm categorized as a hurricane by the national weather services. A named-storm deductible needs a declared tropical system carrying a name or a number. A wind-hail deductible fires on any wind or hail at all, which is how a hail policy in Colorado, Texas or Oklahoma carries a percentage deductible with no hurricane in the analysis. As of June 2025, nineteen states and the District of Columbia had one of these in the market.

Third: per event, per season, or per calendar year. That decides the bad year rather than the bad storm.

Decision three: replacement cost, actual cash value, and the roof

Replacement cost is what it costs today to repair or rebuild with materials of like kind and quality. Actual cash value is that figure less depreciation for age and wear. A state insurance department guide, last updated 1 June 2026, puts the pair in those terms.

The default on contents is the depreciated one. In the standard form the building settles at replacement cost while the personal property settles at actual cash value, and replacement cost on contents is bought by endorsement.

Timing is the other surprise. Even on a replacement cost building claim, the 2022 edition of the standard form pays no more than actual cash value until the work is complete, then releases the recoverable depreciation it held back. The balance stays available only where the insurer was told, within 180 days of the loss, that repair was intended.

The roof is where this gets surgical. A policy can read replacement cost overall and still settle the roof at actual cash value for wind and hail. The 2026 homeowners data call counts the two bases as separate line items and folds age-keyed roof payment schedules into the actual cash value column. No national age threshold exists, so the question is the basis, and the age at which it changes.

Decision four: which endorsements earn their form number

Scheduling valuables does two things. The base form caps theft of jewelry, watches, furs and precious stones at two thousand dollars in the 2022 edition of the standard form and fifteen hundred in the 2011 edition, as a total for the category rather than per item. A schedule lifts those items out of that pool, because the form declines to cover articles separately described and specifically insured, and widens the causes of loss to include accidental loss and disappearance.

Water backup buys back a slice of the water exclusion, with its own sub-limit and often its own deductible.

Ordinance or law is an exclusion and a coverage at once. The exclusion removes the cost of code compliance; an additional coverage hands back up to ten percent of Coverage A in the 2022 edition of the standard form, and the endorsement raises that percentage. The older the house, the wider the gap between rebuilding what stood there and building what the department now permits.

Extended replacement cost is a cushion above the dwelling limit, commonly a quarter above it in a state regulator guide updated in September 2021.

Two perils sit outside this list. Flood damage is excluded under standard homeowners policies and is bought as a separate contract, federal or private, rather than as a form number added to this one; earth movement is excluded in the same section, available by endorsement or as a standalone policy, and normally written with a percentage deductible on the dwelling value rather than a flat amount. That pair marks the edge of what a homeowners insurance policy grants, and the dwelling cover a lender tracks under hazard insurance sits inside that edge rather than beside it.

The decision being made about you

Rating determines the premium charged. Underwriting determines whether the company will write the risk at all. An online estimator does the first. The second is not a lookup. Two files open without the caller producing them.

One is loss history. C.L.U.E. holds up to seven years of personal property claims, according to a state insurance office fact sheet revised in May 2026. It is a subscriber exchange rather than a registry, so a loss filed with a company that does not contribute never appears. An unpaid claim still counts: the record is created by the request, not the payment.

The other is a credit-based insurance score, which regulators describe as an estimate of how likely a household is to file a claim, not of whether debts get repaid. It does not apply everywhere: Maryland bars credit history from rating a homeowners risk, and Michigan keeps it out of the deny, cancel and non-renew decisions while permitting it in premiums.

House insurance, household insurance, and the words people type

The search box gets every arrangement of the same few words: insurance for home, insurance home, insurance for house. They resolve to one product: a policy on an owner-occupied dwelling. House insurance is ordinary American speech for it. Household insurance is the outlier, British usage and older American usage, still typed daily, and no declarations page here prints it.

Next after buying home insurance

Questions that come up between the four decisions