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Questions You Need to Ask When Buying Home Insurance

Written by Posted On Friday, 26 July 2019 15:55

Legally, you can own a home without buying home insurance, that is, if you paid for your home in cash. If you have to finance it with a mortgage, your lender will likely require you to purchase homeowners insurance. You may even be required to get separate flood insurance or earthquake insurance coverage if your home is situated in an area prone to such disasters.

Then again, whether you’re required to buy home insurance or not, it’s wiser to get one just the same. We live in a world of uncertainty, with the nagging fear that one day, we could lose part or all of our home in the blink of an eye for one reason or another.

If you’re a homeowner, home insurance is the one thing that could give you peace of mind in a world where anything can happen. With home insurance coverage , you can rest easy knowing that when disaster strikes, you’ll receive proper compensation to rebuild your home or replace anything that you lost.

Shopping for home insurance, however, does bring its own set of concerns. You need to ask the following questions before buying home insurance:

Is your insurance company in good financial shape?

This may be a little on the blunt side of things, but with so many insurance companies out there vying for your business, you need to make sure you’ll be buying your home insurance policy from a company that can actually cover you should you ever file a claim.

Then again, agents will probably answer in the affirmative, so take whatever information they give you about this, and then verify them via the NAIC (National Association of Insurance Commissioners) Consumer Information Source.

What will my home insurance policy cover?

In general, a home insurance policy will cover partial or total damages caused by disasters listed in your policy, which are usually fire, hurricane, lightning, and hail. A standard home insurance policy does not cover flood and earthquake-related damages or losses. You will have to get a separate insurance policy for that.

In case of total loss, how much would rebuilding my home in its current location cost?

Whatever the cost of rebuilding your home from scratch, your home insurance policy should cover it. That’s why you need to thresh the details out with your agent to make sure you have the right coverage. Your agent should be able to calculate the rebuilding cost accurately as long as he or she is familiar not only with the neighborhood itself but also with the construction materials your home was built with originally.

Will my insurance be enough to replace my possessions in the event of total loss?

The amount of coverage for your clothing, appliances, furniture, and other personal belongings will depend on the amount of protection you have on the structure of your home. Typically, insurance companies cover about 50 to 70 percent of the coverage on your home’s structure. So if your policy insures the structure of your home for $100,000, its coverage for your belongings will be pegged at $50,000 to $70,000.

If you want to know if this is enough personal property coverage, perform an inventory of your belongings and estimate the cost of replacing them in the event you lose them to a disaster.

How much liability protection should I get?

A home insurance policy typically has personal liability coverage, which will pay for any bodily injury or property damage you, any member of your family, or your pets inflict on other people. The amount of coverage, however, will only be up to a set dollar limit, generally starting at $100,000. If the cost of your personal liability exceeds that limit, you will have to pay for the difference out of pocket.

If you want greater liability protection than what your home insurance will provide, you may want to discuss an optional personal umbrella policy with your agent.

How do I file a homeowners insurance claim?

Your policy will have a condition that you must promptly inform your insurance company about your loss, so that is always the first step when filing a claim. Get the name of the insurance company staff you spoke with about your claim and take note of everything you discussed. You should also draw up a timeline of events after the damage or loss has taken place.

Eventually, your insurance company’s claims department will assign you an adjuster who will come to your home to assess the damage or loss. Don’t forget to confirm with your adjuster the steps the insurance company will require you to take. Once you complete those steps and submit all requirements, wait for their approval, the time frame for which could vary depending on a number of factors, including the size of the claim and the extent of the repairs.

However, if you feel that the length of time you’ve been waiting for the payout is already unreasonable, it’s possible your insurer is delaying your claim. If you suspect your insurance company is not following through on their obligation, you may have to involve a skilled and experienced attorney to help resolve your home insurance claim once and for all.

These are just some of the questions you need to ask when buying home insurance. Think of some more, write them down, and never hesitate to ask them to ensure that you’ll get nothing but the best home insurance policy for you and your family.

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Rachael Harper

Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a home insurance and wealth management firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.

https://www.bennettandporter.com/

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