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10 Questions to ask Before Purchasing Homeowners Insurance

By Compuquotes Team on March 27th, 2008

Homeowners Insurance

When you purchase homeowners insurance, there are many questions that you should ask of your insurance agent or broker, or the insurance company if you are dealing with them direct, that will help you to understand more about your home owners insurance policy. It is important to realize that your home owners insurance policy will replace your possessions in the event of a loss - possessions that, if lost, would be expensive to replace, especially if you were faced with a total loss and everything was destroyed. Let`s look at a list of the top 10 questions you should ask before you sign on the dotted line of your home owners insurance policy.

1. What kind of home owners insurance policy do I have (HO-1 to HO-8) and what and who is covered under my insurance?
There are eight levels of home owners insurance in the United States ranging from full home owners insurance that covers everything in your home as well as all the contents. There is also a home owners insurance specifically for condos, mobile homes, renters and your priceless items.

2. Is the insurance that I have enough?
You have to make sure that your insurance will cover your assets and all of the possessions in your home. If you own your home, you want to ensure that the building is fully covered from damages or you could risk losing everything and still owing the bank money on your mortgage.

3. What is not covered with my home owners insurance policy? What is excluded from the policy (possessions and perils)?
Find out what is and isn't covered in your home, specifically. Your policy should thoroughly outline everything that is covered - if you aren't sure - ask.

4. Does my home owners insurance give replacement cost, and is it guaranteed replacement cost?
There`s a big difference in these two terms, you want a guaranteed replacement cost for your items not just replacement cost - the difference could be quite severe.

5. Are there any limits on valuables such as computers, silverware or jewellery?
If you own these items be sure to find out if they are covered.

6. Does my policy cover any water damage? What will it cover?
Most home owners insurance policies will cover overflow water damage but damage from flooding is often not covered.

7. Should I consider any optional or extra home owners insurance coverage?
Flooding and earthquakes are often not covered, nor are your priceless paintings. There is optional home owners insurance for these perils and items that are not covered with your insurance policy.

8. How much is my deductible? Can I save money by choosing a higher deductible?
Your premium (payments) will be less if you have a higher deductible in most cases. You have to weigh the options of having lower payments and a higher deductible verses having a lower and perhaps more affordable deductible.

9. Are there any safety features that I could install in my home that would save money on my home owners insurance policy and increase my protection with my policy?
Most often, the answer is yes. Your insurance agent will be able to help you with these types of upgrades that could save you a lot of money in premiums.

10. Does the insurance company offer 24 hour claims service? How do I file a claim and what are my responsibilities with claims?

Finding out this information will be helpful for you if you ever have to make a claim.

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