For many homeowners, especially first time buyers,
purchasing homeowners insurance can be a difficult process. With all the
different insurance policies out there, how do you ensure you choose the right
one? It may seem like a no brainer, but most people forget to ask questions
before purchasing a homeowners insurance policy. Knowing the answers before
selecting your policy can save you money down the line or avoid a potential
headache when it’s time to make use of your policy.
So, here are 7 questions to ask before choosing your homeowners
insurance policy:
- How much will it cost? Seems
simple, but it’s an important one that should be asked up front to prevent
you from wasting time on a plan that’s outside your budget. Many insurance companies will
provide a calculator tool which will allow you to get a quote or an
estimate yourself without speaking to a representative. But, the best way
to find out how much you might pay is to speak to a professional insurance
agent who can answer any questions you might have. Ask about any discounts
available based on your job type, family status, location, or whether
you’re a first or long-time homeowner.
- Is there a deductible? Most policies
will include a deductible amount; these can vary from policy to policy. The
deductible amount must be paid before the insurance company will pay your
claim. You should ask what specific losses require that a deductible be
paid.
- What is covered? Yes, you should
definitely ask exactly what your insurance covers. One of the biggest
mistakes a homeowner can make is not asking this question and being
surprised when accidents or circumstances – natural or otherwise – occur
that could leave you uncovered.
- What isn’t covered? Ask about what
your policy doesn’t cover. I know it seems redundant having already asked what
is covered, but the more you ask the better understanding you’ll have.
Specifically, ask about any exclusions in the policy such as:
● Wear
and Tear
● Earth
Movement
● Flood
- What optional coverage is available on
the plan? Many times, homeowners may wish to insure less common items,
parts of their home, and other things that may not necessarily come
standard with the policy. It’s
always a good idea to ask what other optional coverages are available to
protect your home, family, and belongings.
- Are rates affected by the type of
construction? Would it matter if your home were brick or frame or
something less conventional? It’s better to be safe than sorry; ask before
you agree to any plan terms.
- Do you offer umbrella coverage? Umbrella
coverage provides additional protection with higher limits of liability
coverage for your home, vehicle, and other personal belongings.
As you do more research, you may
have additional questions not included in the list above, so be sure to add
them to your checklist. It’s always better to go in with a lot of questions as
this will help you rest assured that your home, family, and personal items
receive the maximum level of protection.
