Your home is probably your most precious asset, so protecting it makes sense. As such, you can consider securing your homeowner an investment in protecting your financial future. Before you buy a premium-based policy, ask your insurance provider these five questions to make sure you get the coverage you need.
# 1 – What is (and is not) covered by policy?
The most important part of your home insurance is the policy itself. What exactly will it cover? What happens if your lawn mower is stolen from the garage? Will you get the full purchase value or will you get depreciated value? If you accidentally injure someone outside your home, will that be covered by your policy? Finding out exactly what your policy covers will help you decide how much and what type of insurance you buy.
# 2 – How much cover do I need?
An insurance agent will often ask you to list your property. This is called home inventory and can greatly assist you in the event of a disaster, fire or even robbery. The best rule of thumb is to evaluate all your assets and then buy an insurance policy with a cover that exceeds this amount. It will also help you decide if you should buy any rider, which is an addition to your policy that protects unusual items like very expensive jewelry or expensive paintings.
# 3 – How much will it cost to renovate my home?
Part of your insurance policy will be directed to your actual apartment or any damage that may occur to the structure of your home. Keep in mind that since real estate prices are very often – and often significantly – they want to make sure that you are buying a policy that covers the cost of renovating a home, not one that only covers the purchase price.
# 4 – What types of claims were once in my home?
Learning about and understanding the types of claims in the past may have helped you decide what type of coverage you currently need. For example, if your home is in a flood state and has succumbed once or twice in the past, you will want to purchase separate flood insurance. Along those lines, if severe storms have been problematic in the past, then they are likely to be problematic in the future as well.
# 5 – What happens when something happens?
Lastly, it’s important to find out what to expect when it comes time to apply. Will you be able to speak directly with your local agent? Will they come and assess the damage immediately or will you have to wait a few days? Will the company accommodate the family at the hotel until repairs are completed? Understanding things like this will not only help you make better choices about your policy, but will also give you some peace of mind.
When you get all these questions answered, then you have the information you need to make a wise decision. Make sure you understand what is and what is not covered, how the insurance company values your home and how it will treat you when you need to file.