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The state of Utah is similar to other non-disaster-prone states when it comes to home insurance. State law does not obligate homeowners to purchase insurance for their real property, but mortgage lenders do require home insurance. However, while not mandatory, home insurance is crucial to protect your real property, personal assets, and family in the case of a fire, flood, or other natural disasters.

Replacement value or actual cash value

In Utah, homeowners have two options for home insurance coverage: replacement value or actual cash value. If you opt for replacement value cost, you agree to file a claim for the value of reimbursement for replacing structural materials for the dwelling before any deductions or depreciation. If you opt for actual cash value, you agree to file a claim that would reimburse you for the actual cash value of the total replacement. Generally, replacement value policies come with cheaper premiums. However, it is important to insure your home at least up to 80 percent of the replacement cost.

Annual review

Licensed agents in Utah are required to update their policies each year. This provides the consumer with the opportunity to review their coverage and either make amendments, if any changes have occurred in the last year, or switch providers. The insurance coverage is a legal document, so without an annual review, consumers would be stuck in coverage that potentially is no longer appropriate for the home in which they reside. Take this annual opportunity to make sure that your coverage matches your possessions, home value, and other structures on the property.

Condominium owners

Utah state law has provisions that require homeowners in condominiums to have adequate home insurance. However, this insurance is often purchased collectively through a condo association, and then premiums are distributed equally throughout the condo community. If you want a say in how your condo coverage is negotiated and selected, you might need to join your condo association, either in a voting or non-voting role, so that your voice can be heard.

Home-based business

If you operate any kind of business, whether full- or part-time, you will need to file an additional endorsement with your insurance agency. In the event of a home insurance incident, your possessions and structure may be vulnerable if you have not provided additional insurance for a business operating out of the home.