When you’re shopping for homeowner insurance, remember that policies can vary widely. Some coverages may be included, and others may be available for additional premium.
Here are some questions you might want to ask your independent insurance agent:
- Is my home covered for full replacement cost? This is one of the key distinctions between homeowner policies, and you’ll want to know the answer. If your home is covered only for its current market value – or worse, your loan amount – you are likely underinsured and would not be able to rebuild the home to its current state in the event of a loss. Make sure the insured value takes into consideration all of your home’s features. The cost to rebuild is likely to be significantly more than the current market value or your loan amount. See our prior blogs: Don’t be surprised by the cost to rebuild your home; 7 factors to help nail down your home’s reconstruction cost; and Insurance TLC for your historic home
- How much is the deductible on my policy? The deductible is the amount of a loss that you pay. If you can afford a high deductible with savings or other resources, you can usually reduce your premiums. Your agent can help you find the right balance.
- Does my policy include earthquake coverage? Not all policies do. If yours doesn’t, you may be able to obtain earthquake coverage for additional premium. Your agent can advise you on the need for earthquake coverage in your area. Don’t assume that you don’t need it.
- How much coverage do I have on the contents of my home? Contents coverage is usually a percentage of the insured value of the home. Some policies automatically provide contents coverage of 50 percent of the value of the structure, others provide 70 or 75 percent. And, you may be able to increase the amount of coverage for additional premium.
- Does my policy insure against water damage from sewer backups, sump overflows or water pressure from below the ground surface? Most standard policies do not provide coverage for these losses, but you may be able to obtain coverage for additional premium.
- Does my policy provide any coverage for disappearance of jewelry or silverware? While a policy may provide a specified limit of coverage for theft of these items, “mysterious disappearance” of these items may not be covered. Ask your agent to clarify this, and inquire if coverage is available at additional premium.
- Does my policy provide any liability coverage for slander, libel, defamation of character, invasion of privacy or identity theft? Some homeowner policies automatically cover these items while others require an extra premium. Know before you buy.
Ask your agent to help you evaluate your needs and your situation so that you have no surprises should you have a claim.
Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent.