10 Questions to Ask your Insurance Agent about Homeowners Insurance
When considering homeowners insurance, what are some of the questions you should be asking? We go over 10 important questions you should ask when looking into homeowners insurance.
1. What does a standard homeowners policy cover?
The core of a homeowners insurance policy includes four main categories:
Dwelling Coverage- coverage for the damage to your home from covered hazards
Other Structures- coverage for detached structures, such as fences or sheds
Personal Property Coverage- protection for your personal items within your home, such as furniture and clothing items
Liability Coverage- coverage for others in the event of an accident on your property. Protection could include coverage for your legal expenses or coverage for the pain and suffering of others injured on your property
Medical Payments to Others- helps to pay the medical bills of others injured on your property.
2. How much coverage do I need?
In determining this value, it is important to consider how much it would cost to rebuild your home in the event of a total loss. Your agent is an excellent resource in helping you determine how much coverage you would need.
Your agent can also help you determine the liability coverage you need to provide protection for you in the event of an accident for which you may be held liable.
3. Replacement Cost versus Actual Cash Value. What type of policy am I buying?
It is important to understand how your dwelling and personal property will be replaced in the event of a loss. Replacement cost will replace as if new. Actual Cash Value will replace at the depreciated value.
When purchasing a homeowner’s policy, remember to consider the effect of inflation on the value of your home. Some policies only cover the initial purchase price of your home, while others include the actual replacement cost. Even in depressed markets, the cost to replace or rebuild your home does not march step in step, therefore, be sure to ask about a Replacement Cost policy. In addition make sure your agent explains to you how the policy pays in the event of partial loss and in the event of a total loss. Remember, it is ultimately your responsibility to make sure your home is properly covered. Look at the coverage first, then look at the premium.
4. What additional coverages are a good idea to have on my policy?
Besides the core coverage in a homeowners insurance policy, there are additional coverages you can add as endorsements. Some of the key endorsements are service lines and water back-up coverage.
Service lines coverage is used in the event that utility lines, piping, or wiring between the street and the home are damaged. The homeowner is ultimately responsible for damage to these lines on the property, so this coverage is a big money saver for a minimal cost.
Water Back-up provides coverage in the event of water or sewer back-up from your drains. Water can cause substantial damage to your property, so this coverage can help provide protection for this disruption.
There are other coverages that can be added by endorsement or purchased separately. Some of those include special personal property, cyber insurance, mechanical breakdown of household appliances, or even ID fraud. It may be wise to look into Flood Insurance for your property. Talk with your agent to see what is best for your home.
5. Is My Personal Property Covered?
While standard homeowners policies include coverage for personal property, it is important to talk to your agent about items you have in your home so you can have the coverage you need. Policies often have limits on the amount of coverage for specific types of items in your home.
If you need to have increased coverage on certain items, reach out to your agent. Specifically insuring these personal items through an endorsement on your policy may be the way to go to get the protection you need.
6. How much Personal Liability Protection do I have?
Liability covers you against lawsuits for bodily injury or property damage caused by you or your family members. It can also provide coverage in the event of an accident on your property. In some policies, damage caused by your pets can also be covered. Recovery from these events can be pricey, yet this coverage is usually inexpensive. Discuss with your agent about the amount of liability coverage you need.
7. Do I need Umbrella Policy Coverage?
Umbrella coverage is extra liability insurance above the standard limits of your home, auto, or boat policies that protect you and your assets from major lawsuits and judgments. Purchasing this insurance can help to protect the assets you have worked so hard to accumulate. One event, if not properly insured, could wipe out a lifetime of work, sacrifice, and savings.
8. How do I file a Claim? Does the Carrier Have On-line 24 Hour, 7 Days A Week Service?
In the event that you need to file a claim, what does the process look like? Does the carrier have on-line, 24 hour/7 days a week service? Is there someone there to answer the call when it counts?
It is good to know how claims are filed. No one wants to file a claim. But, when you need to make that call, it is important to know the process. Do they have 24-hour claims service? Can you file a claim and service your policies online? Ask your agent to explain this process so you can be prepared in the event of a loss.
9. How can I save on my policy premiums ... Are there any discounts available?
There are many ways to receive discounts on your policy premiums. By combining auto, home, and life insurance with a full line insurance company you should expect to receive significant savings on your total insurance premiums. Not only will you save money, but also by combining all your insurance needs with one full line insurance company you’ll save you a lot of time and frustration by working with one carrier.
You may also want to consider a higher deductible or installing a security system. Ask your agent about other discounts that you may qualify for.
10. Do upgrades on my home matter to my policy?
You finally installed your dream kitchen or put that pool in the backyard. Do you need to tell your agent? When you complete any upgrades to your home or add any structures, let your agent know as soon as possible.
When you upgrade your home, you increase the cost it would take to replace your home in the event of a total loss. That replacement cost needs to be updated in your policy to help you have the coverage you need. There can also be instances with liability with structures such as a pool. Remember that your agent is there to help you with these and other questions.
Even though this answers common questions, there are always specifics to discuss. Please don't hesitate to call today to get your questions asked and answered.