November 13th, 2014
Home insurance can be a tricky matter to deal with either for the first time or when updating your policy. Insurance agents are available to guide you through the process and make sure you're getting a plan that fits your and your family's needs. It's important to remember that you should always shop around and ask for second and third opinions before settling on one specific plan or provider. Doing prior research will give you a better idea of what to expect when speaking with your agent.
Here are six important questions every homeowner should ask:
1. How much is my personal property worth?
Depending on your policy, the items inside of your home may not be covered. Furniture, valuables and personal possessions are typically covered under a property insurance add-on. You'll need an estimate of your property's worth prior to inform how much liability you should take out.
2. What discounts am I eligible for?
Every insurance company offers a host of rebates and discounts for trusted customers. First-time homebuyers, the elderly and those who file fewer claims are usually given discounts in some capacity. Additionally, updating your home with eco-friendly fixtures, a security system and new materials can also garner you a discount. Agents may not notify you of these options upfront, so it's best to have these things in mind beforehand.
3. Can I bundle my policies together?
Sticking with the same provider can be financially harmful if you're not actively looking for better deals. Many homeowners take their insurance for granted and simply renew their policies without doing a little shopping. However, in the case of bundling, it actually makes a lot of sense to stay with the same company. If you have auto insurance from one company, then you could also take out a homeowners insurance policy with the same provider. This will make you a valued, loyal customer, which could earn you a discount, lowering your combined prices overall.
4. What isn't covered under my plan?
It's always terrible to find out something isn't covered after the fact. For instance, home insurance does not cover flood damage. Many homeowners just assume that flooding is covered because other natural disasters like fires and tornadoes typically are. Further, the land on which your home is built may not be insured either, so if there is damage that occurs to your property, you could be left to pay out of pocket.
5. What's my liability limit?
Insurance companies will only pay up to a certain amount in the event an accident occurs in your home. If you have a guest over and he or she falls down and is injured, you could be sued. Your provider will cover a set dollar amount up to a point, but you must pay the remaining amount. Discuss with your agent what your limit is and whether or not it should be adjusted. Most homeowners opt for a higher liability limit to insure themselves against unexpected lawsuits.
6. How much is my deductible?
Before your provider begins paying out for insurance claims, you must first pay the requisite deductible. If you file a claim that is $2,000, but you and have a deductible of $500, you must pay the $500 first, before your insurance pays the rest. Your deductible can be lowered or raised depending on how risky you are and how often you file claims. Homeowners commonly increase their deductible so their monthly premiums are lower.
Speak with your insurance agent in detail about the specifics of your insurance policy.
CoverHound can help you get the best deal on your home insurance by comparing quotes.