If you are planning to shop online, then you need to have some basic information at your disposal. The first resource in the list of necessary information would be a tax bill or an appraisal. The home appraisal has much of the information necessary to obtain an adequate quote. The market value of the home, the square footage, and the value of the property minus the value of the land are the most important criteria used to determine the amount of home owner insurance needed. The market value and age will dictate the type of policy to purchase. The renewal declarations page is a valuable source of information for the comparison shopper.

There are two primary types of home owner insurance: Actual Cash Value and Replacement Cost.

Actual cash value is one way the insurance companies settle losses. This method will calculate the actual replacement cost at the time of loss and subtract any depreciation because of age or use. You will generally see actual cash value policies written on older homes. Many of your older homes have a market value much less than the cost to rebuild. The homes built in the early 1900's are a good example, having ample amounts of ornate woodworking, as well as other architectural details. With this type of policy, these types or amenities will likely not be able to be replaced by the insurance proceeds in the event of a fire due to the depreciation component, which can be significant. Replacement of these design details can be very labor intensive, and thus costly. While the insurance proceeds would provide for the repair and rebuilding of the home, there will likely not be enough funds to pay for all of the previous fancy details. To be certain of their replacement, the other form of home owner insurance should be used.

Replacement Cost - This method is used for newer homes or homes under construction. Replacement cost claim settlements use materials of like kind and quality when repairing or rebuilding the structure and there is no allowance for depreciation, guaranteeing identical replacement of the original state of the structure.

The correct square footage is very important as the online insurance calculators determine the actual cost to rebuild your home based on your square footage calculation. Any extras such as air conditioning and fireplaces are upgrades that increase the replacement cost value of your home. Finished basements and outdoor decking also add to this calculation.

Generous discounts are given for smoke detectors, security systems, dead bolt locks, and fire extinguishers. There are even larger discounts for burglar and fire alarms that transmit directly to the police station and fire department. Be prepared with this information and your online shopping for home owner insurance will be much quicker, easier, and more accurate.