Ask the Right Questions Before Buying a Homeowner’s Policy
Emily Sperry September 04, 2019
Homeowner’s insurance policies are essential to protecting your home. From safeguarding you in the event a visitor is hurt on your property, to covering your assets in the event of theft or natural disaster damage, there are many protections a homeowner’s insurance policy will provide. But, not all insurance policies are created equally. And, not everything you might think is covered is truly covered by an insurance policy. Before you choose your insurer based on the lowest prices alone, consider asking your insurance agent a few of these relevant questions.
How Much Insurance Do I Need?
Most homeowner insurance policies offer a minimum of $100,000 in liability. But, there are some instances you might choose to buy more coverage. It’s recommended for homeowners to buy a minimum of $300,000 in liability. If you have expensive jewelry, live in a zone where natural disasters occur, or live in an area prone to theft/burglary, it’s a good idea to up your coverage limits. You’ll need to weigh the costs of your assets, the value of your home, and consider how much those items equate to, in order to determine the appropriate limits for your homeowner’s insurance premiums.
Are There Exclusions in My Policy?
Another way to think of this inquiry is “what doesn’t my homeowner’s insurance protect?” Some of the exclusions you’ll find with most homeowners policies include
- Water/flood damage (other natural disasters in certain areas of the country if they are common/frequent)
- Loss of property due to faulty zoning or workmanship
- Earth movements
Defamation liability, maintenance issues, acts of war/terror, and mechanical breakdowns, are often excluded from policy coverage as well with most insurance companies.
Does My Policy Offer Replacement Cost or Actual Cash Value?
The actual cash value is the depreciated value of property in your home over time and this would be what you’ll receive at the time of loss if your policy offers actual cash value protection. It will compensate you for the value of items after wage and wear and tear are factored in. The replacement cost would provide you with what it would cost to buy a product of the same like, kind, or quality (i.e. a new replacement 48″ flat screen tv of the same brand). You’ll want to discuss this with your insurer, to ensure you know how much is actually covered on items you’re protecting in your insurance premium.
Are There Limits to Coverage if Guests Are Hurt in My Home?
Yes, for the most part. With homeowner protection, you have liability coverage that will take effect if guests are injured in your home. Some exclusions do apply, however. For example, if your guest is injured by a dog, you might be covered. But, if you own a dog that has a natural propensity to injure or is specifically excluded from coverage due to the type of breed, limitations exist. Most property damage injuries are covered, unless they’re the result of poor workmanship or poor upkeep of your property.
Is Water/Flood Damage Covered?
Destructive weather, such as ice/hail or fire damage are covered. However, certain types of water damage aren’t covered by homeowner’s insurance policies. typical homeowners policy covers burst pipes as long as they aren’t due to negligence or vacancy. A policy can be endorsed to include water/sewer backup and even limited coverage for water seepage. But flood insurance is excluded and a separate policy must be obtained.
How Can I Reduce My Homeowner’s Insurance Premiums?
There are several ways to reduce your homeowner’s insurance premium rates. Some of these include
- Improve home security
- Increasing deductible limits
- Bundling policies (home, life, auto, etc.)
Maintaining a good credit score also helps reduce your rates as does remaining with an insurer for a long period of time and not filing claims frequently.
Regardless of which insurer you choose to go through for homeowner’s coverage, it’s important you know what is (and isn’t) covered. Make sure you ask the right questions when comparing policies and eventually deciding on the best policy to safeguard your home. Looking for the best rates on homeowner’s coverage? Let us assist you in comparing policies and finding the best coverage, for the most affordable price.