Homeowners Insurance: Policy Snapshot & Core Property Protection

Policy Snapshot

(OCT Section 1)

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Before comparing coverage details, it’s important to understand what kind of policy you’re actually looking at. The Policy Snapshot section of the Offer Comparison Tool exists to anchor every comparison that follows.

This section answers a simple question:

            Are these policies fundamentally comparable?

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Insurance Company

This identifies the carrier issuing the policy. While brand recognition can matter for service and claims handling, the company name alone does not tell you how strong or weak the coverage is. Two companies can offer dramatically different protection even at similar prices.

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For comparison purposes, the company name is a reference point — not a decision point.

Policy Form (HO-3, HO-5, etc.)

The policy form describes the general structure of the coverage, not the full details.

For example:

• An HO-3 typically provides open-peril coverage for the dwelling and named-peril coverage for personal property.

• An HO-5 typically provides open-peril coverage for both the dwelling and personal property.

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However, policy forms are not guarantees. Endorsements, exclusions, and carrier-specific language can significantly change how a policy behaves.

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That’s why the policy form belongs at the top of the OCT:

• It sets expectations

• But it does not replace a deeper review

Annual Premium

The premium shows what the policy costs, but price only has meaning when viewed alongside coverage quality.

At this stage, the premium should not be judged as:

• Expensive

• Cheap

• Good or bad

Instead, it should be treated as a number that will later be evaluated in context — after coverage limits, valuation methods, deductibles, and exclusions are understood.

Base Deductible

The base deductible is the amount you pay out of pocket for most covered losses before insurance responds.

This field belongs in the Policy Snapshot because:

• Deductibles materially affect real-world risk

• A low premium with a high deductible may not be a better policy

• Separate deductibles may apply later (wind, hail, hurricane)

At this stage, simply record the deductible.
Its impact will become clearer as the rest of the policy is evaluated.

Why This Section Matters

The Policy Snapshot prevents false comparisons.

If two offers differ significantly in:

• Policy form

• Deductible structure

• Overall design

They may not be directly comparable — even if the premiums look similar.

This section ensures you know what you’re comparing before moving on to how well it protects you.

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Core Property Protection

(OCT Section 2)

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Core Property Protection is the foundation of every homeowners insurance policy. Most other coverages either depend on it, scale from it, or are triggered by losses to it.

This section of the OCT is where meaningful differences between policies usually begin.

Dwelling Coverage (Coverage A)

Dwelling coverage insures the structure of the home itself — including materials, labor, and permanent fixtures.

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This is the anchor coverage of the policy.

Many other coverages are calculated as a percentage of Coverage A, including:

• Other Structures

• Personal Property (in many policies)

• Loss of Use

Because of this, an incorrect dwelling limit can weaken the entire policy.

When recording Coverage A, the key question is not:

          “Is this enough to buy my house again?”

The correct question is:

          “Is this enough to rebuild my home at current construction costs?”

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Dwelling Valuation Method

The valuation method determines how losses are paid, not just how much coverage exists.

Common valuation methods include:

• Replacement Cost Value (RCV) – Pays the cost to repair or rebuild without depreciation

• Actual Cash Value (ACV) – Deducts depreciation from payouts

• Guaranteed or Extended Replacement Cost – Provides protection beyond the stated limit under certain conditions

Two policies with the same dwelling limit can produce very different claim outcomes depending on the valuation method.

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This field is critical for understanding coverage quality, not just coverage size.

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Extended or Inflation Protection

Many policies include provisions that increase the dwelling limit automatically over time or during a covered loss.

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Examples include:

• Inflation guards

• Extended replacement cost percentages

These features help account for rising construction costs, but they vary significantly by carrier and policy.

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When comparing offers, note whether this protection exists and how it is applied.

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Other Structures (Coverage B)

Other Structures coverage applies to detached structures on the property, such as:

• Garages

• Sheds

• Fences

This coverage is often set as a percentage of the dwelling limit rather than a flat amount.

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Because it scales from Coverage A, under-insuring the dwelling can also under-insure other structures — even if they appear adequately covered at first glance.

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Personal Property (Coverage C)

Personal Property coverage applies to belongings inside the home, including furniture, clothing, electronics, and other personal items.

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Like Other Structures, this coverage is often calculated as a percentage of the dwelling limit.

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However, the limit alone is not enough.

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Personal Property Valuation

Just as with dwelling coverage, personal property can be valued differently:

• Replacement Cost – Pays the cost to replace items with new ones

• Actual Cash Value – Deducts depreciation

This distinction has a major impact on claim payouts and should always be recorded in the OCT.

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Two policies with the same personal property limit can behave very differently during a loss depending on valuation.

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Why This Section Matters

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Core Property Protection determines:

• How much of a loss the policy can absorb

• How claims are calculated

• Whether the policy functions as expected after serious damage

Most coverage failures in homeowners insurance begin here — not because coverage is missing, but because limits or valuation methods were misunderstood.

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This section establishes the financial backbone of the policy and prepares you to evaluate the remaining coverages with clarity.

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What Comes Next

Next up:

• Section 3: Loss of Use (LOU)

• Section 4: Liability Exposure