Homeowners Insurance & Questions Every Buyer Should Ask

In order to get the best coverage at the lowest rates, new homebuyers will have many homeowners insurance questions answered. When you are buying a policy, make sure you understand both what is covered and the factors affecting your cost. It is important to come prepared with questions prior to signing any contract. If you do not ask, most of the time the insurance company will not take time to explain your policy.

Property Questions to Ask

Property damage covers damage to both your home and the items inside the home. Most claims on homeowners insurance are property claims; it is integral to understand your property coverage. Pay attention to exclusions in the portion of the contract dealing with your property coverage. The exclusions will likely be listed at the end of the policy. Ask the following questions:

  • Which property is covered? For example, if you have a shed or deck, are these covered?
  • Which disasters are covered?
  • Are any types of disasters excluded such as flood or earthquake?
  • What personal property is covered (such as a car in the garage, etc.)?
  • Do I need to list high price items separately such as jewelry or electronics?
Living Expense Questions to Ask

If you cannot live at home because of a natural disaster, gas leak or any circumstance, your expenses to live elsewhere should be covered. This is an area where you may seek low deductible. The likelihood of this type of claim is much lower, and you will not typically have more than one living expense claim in a five-year period.
  • Are there duration limits to my living expense coverage?
  • Does this cover basic shelter only or is eating expense, storage and other options available?
Personal Liability Questions to Ask

Personal liability insurance protects you against any claims resulting from negligence that caused an accident on your property. For example, if someone falls on the cracks in your sidewalk, you may be liable. Personal liability protection is especially important if you are perceived to have "deep pockets." Therefore, if your home appears expensive or you drive luxury cars, you are more likely to be sued.
  • What are my defense cost limits?
  • If I rent a room, how am I protected against my tenant? Separate insurance lines are likely required.
  • If I run a home business, are business activities protected? Separate insurance lines are likely required.
Renewal Questions to Ask

Renewing your homeowners insurance is not always simple. Your rates may go up, or exclusions may be added. Keeping your claims low during the year will generally protect you from these types of activities. However, make sure you have the option to seek different rates or different companies.
  • How long is the window for notice of nonrenewal? This is at times set by the state insurance board.
  • Do I have a monthly payment option in case I cannot commit to a year at a specific rate?
  • Are there any claims that would lead to a notice of nonrenewal on the part of the insurance company?

 

blog comments powered by Disqus