County mutuals have been around since the late 1800’s and are treated differently by state statute and insurance regulation. A county mutual, however, is restricted to where and what it can insure. For instance, a county mutual cannot sell homeowners' insurance in more than 40 counties in North Dakota. A county mutual is usually “local” in territory but some have gone on to become statewide companies.

Homeowners insurance is a contractual agreement between an insurance company and an insured, which, in exchange for premium, provides financial protection for risks associated with owning or renting a residence and its contents.

The homeowners policy is a package policy designed for a single family home. Most packages include liability, dwelling property, personal property, medical payments and additional living expense coverage. Policies do vary, however, in what events (perils) you are protected against. There are two general approaches: a named peril basis, which insures against a list of perils, and an open peril basis, which insures against all perils except those specifically excluded.

The basic and broad coverage peril-based policies cover only the items listed. Therefore, if it is not listed, it is not covered. The special and comprehensive policies are based on all perils being covered unless specifically excluded. The kinds of exclusions are: water damage from flood, sewer backup or seepage, earthquake, war, nuclear accident, neglect, intentional loss, mold, wear and tear, pollution, settling and more. Always read your policy to see what is excluded.

On your residence premises, the real property will be covered. This includes the dwelling and any unattached structures, including fences. Personal property is also covered. This includes the contents of your dwelling, clothing, furniture, appliances and all other normal personal belongings.

Note: some items of personal property like jewelry, guns, furs, golf equipment, etc., may have a limit on the amount of coverage. It may be necessary to put additional coverage on these items by scheduling them to the policy. Automobiles are not covered.

The amount of coverage you should carry can vary depending upon the type of policy you take, whether the coverage is provided on a replacement cost basis or an actual cash value basis, and what your bank may require. It is important to know that under the homeowners policy (HO-3 or HO-5), in order to receive full payment for a partial loss or damage, you must insure your dwelling for at least 100 percent of its replacement value.

Insuring your property to value (replacement cost value) might cost more, but could help you avoid being underinsured should you experience a serious loss. Most insurance companies have estimating programs available to help you in calculating the replacement cost of your home in your area.

Homeowner insurance premiums can vary from company to company depending upon a variety of reasons but predominantly the company's loss experience. Other factors affecting the premium are:

The amount of coverage you buy.

The type of coverage selected. Named peril versus all peril.

Replacement cost versus actual cash value.

The size of your deductible.

Your claims history.

The location of your residence. How close it is to a responding fire department.

The condition of your residence. Premises are kept up and repairs are current.

The type of dwelling. Frame construction, masonry or brick construction.

Basic coverage perils: Fire, lightning, windstorm, hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism and malicious mischief, theft and breakage of glass.

Broad coverage perils: All of the above basic coverage perils and volcanic eruption, falling objects, weight of ice, snow or sleet, collapse of building, accidental discharge of water or steam, sudden or accidental tearing apart, cracking, burning or bulging, freezing, or sudden or accidental damage from artificially generated electrical current.

A deductible is the amount of the claim for property loss or damage that you agree to pay, or the part that is deducted from your claim check. If you chose a higher deductible, you would pay a lower premium for your policy.

When there is a loss to property due to burglary, fire or natural disaster, there are several steps you can take to ensure your claim is properly filed and processed as quickly as possible:

Report the incident to proper authorities. In communicating with your insurance agent or company, note all details of the report including any case numbers.

Keep copies of all correspondence you receive or send regarding the loss or claim.

Protect yourself and your property. If checks or credit cards are stolen, notify the financial institution that issued them.

After a fire, storm, tornado or other natural disaster, immediately take reasonable steps to protect your property from further loss. For example, cover broken windows temporarily with plywood or plastic sheets. Keep a record of your expenses.

Call your insurance agent for advice and instruction.

Take an inventory of damaged, destroyed or stolen property.

Review your policy for possible coverage you may have overlooked.

If your home has been badly damaged, notify the bank or mortgage company that holds your mortgage. Insurance claim checks will be made payable to you and your mortgagee. You will need to work out the details for release of the funds with them.

File any additional claims for ongoing expenses at the time they are incurred.