Homeowners are not really required to purchase home insurance unless their home is being financed with a mortgage. However, it’s always smart to have home insurance regardless of whether it’s a requirement or not. After all, we have absolutely no idea what’s going to happen to our home in the
future. Disaster could strike our home at any time, and the only thing that could give us some peace of
mind about it is home insurance coverage.
When your home is insured, you’ll get compensated to rebuild your home and replace the things you
lost.
But before you buy home insurance, there are some questions you need to ask so you can make an
informed decision. Here are some of those questions.
1. How is your insurance company doing financially?
There are so many insurance companies out there, and you have to be sure that the company you’ll be
doing business with is one that is stable enough to compensate you adequately when you file a claim.
And don’t just take the insurance agent’s word for it in the event he or she says the company is in good
financial standing. You can verify any information the agent gives through the NAIC (National
Association of Insurance Commissioners) Consumer Information Source.
2. What is the coverage of my home insurance policy?
A standard home insurance policy typically covers partial or total damages caused by fire, hurricane,
lightning, and hail. Flood and earthquake-related damages or losses, however, will not be covered. A
separate insurance policy is needed for them.
3. How much would rebuilding my home cost?
Your home insurance policy should cover the cost of rebuilding your home in case of total loss, and
that’s why it’s important you need to work closely with your agent and make sure the coverage
indicated in your policy is just about right. Your agent can come up with an accurate calculation of the
rebuilding cost granted that he or she is acquainted with the neighborhood as well as the type and cost
of materials used in building your home.
4. Will the coverage be enough to replace my belongings?
A standard home insurance policy covers your clothes, furniture, appliances, and other personal stuff,
but the amount of coverage will depend on how much your home’s structure is insured for. Insurance
companies typically cover 50 to 70 percent of the coverage for the structure of your home. That means
a $100,000 coverage for the structure will translate to a $50,000 to $70,000 coverage for your
possessions. Do an inventory of your possessions and estimate how much replacing them would cost so you can find out if the coverage is enough.
5. How about liability protection?
Personal liability coverage is typically included in a home insurance policy, and it’s an important aspect
because it protects you in case people get hurt or suffer property damage within your home. However,
the amount of coverage usually has a set dollar limit. Exceed that limit, and you will have to make up for
the difference yourself. If you want greater liability protection, talk to your agent, and ask about an
optional personal umbrella policy.
6. How do I file a claim?
Should your home sustain any damage or loss during a disaster, your home insurance policy requires
you to inform your insurance company as soon as you can. Call the claims department of your insurance
provider, get the name of the staff you talked to, and make sure to write down everything you
discussed. If you can create a timeline of events after the damage or loss, then that would be great.
Once your claim has been filed, the company will send an adjuster your way.
The adjuster has the task of assessing the damage or loss at your home, and will also advise you about further steps that you need to take as well as the requirements you need to submit.
When you’re done with all of the steps and requirements, the only thing left to do is wait. The time the
company’s approval of your claim could take will depend on factors such as the extent of the repairs
needed and the size of the claim.
Still, if you feel that the approval of your claim is taking way too long or that your insurance provider is
deliberately delaying things, you have every right to take action. Involving a skilled and experienced
lawyer may help you reach a resolution for your home insurance claim much more quickly.
There are many other questions you can ask when purchasing a home insurance policy, but the ones
above should be enough to get you started. If you can think of more questions, don’t forget to write
them down so you can ask them when you get the chance.
About The Author
Rachel Harper is the Content Marketing Strategist of Bennett & Porter a wealth management and
insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books
and playing bowling with her family and friends.