When you get home insurance, it’s important to ask the right questions. But what are the right questions to ask? How can you know what questions to ask if no one ever told you? They don’t exactly teach Insurance 101 in school. To help you figure out what you should be asking the insurance agent helping you with your policy, we’ve come up with a list of seven questions.
7 questions to ask when you get home insurance.
1. Is my personal property that’s in storage covered? What about my college student’s belongings?
If you have some of your personal belongings in storage, you might wonder if your home insurance would cover them if anything happened to them. The personal property section of your home insurance generally follows your belongings wherever they are, meaning that your possessions would be covered even when they’re not at your house. However, it never hurts to ask to be completely certain and to find out what you need to know about the coverage for your stored items.
You might also wonder about your college student’s belongings if they’re living in a dorm. Would your home insurance cover them? Generally, yes. However, if your college student lives off-campus in an apartment, they ought to consider getting renter’s insurance, as your home insurance probably would not cover their belongings.
2. How is my home covered if I experience damage (i.e. file a loss)?
It’s also a good idea to talk to the agent about what happens if you ever need to file a claim. How will that work and how will you get compensated for the loss with the particular insurance company you’re considering?
(Side note: your home should be covered for its replacement cost value, meaning the amount it would take to completely rebuild your home if it were destroyed by a covered loss.)
3. How does the liability coverage work? Will it follow me when I’m away from home?
So, the liability coverage of your policy helps cover your legal obligation to someone else if you’re responsible for causing them bodily harm or property damage. It can help you cover your legal expenses if you face a lawsuit. (It can also help cover the injured person’s medical bills.)
You might want to ask for a quick rundown of what the liability coverage on the policy will do and how it works. (For example, what would happen if your teenager accidentally throws a baseball through a neighbor’s window and smashes a priceless vase.)
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4. What discounts am I eligible for?
Many home insurance companies offer discounts, so it’s important to ask which discounts you might be eligible for. It’s an easy way to save money on your home insurance. Some discounts you might qualify for right away, and others you might qualify for after a certain amount of time.
These are a few common home insurance discounts:
- Bundling (Getting your home insurance and auto insurance from the same company)
- Having a home security system
- Living in a gated community or having an HOA
- Getting a discount for home improvements
- Paying in full
- Being claims-free for a certain amount of time
- Loyalty discount (Staying with your home insurance company for a certain amount of time)
Each insurance company offers different discounts at different amounts, so be sure to ask what discounts you could get and how much they can help you save.
5. How much coverage is there for jewelry?
It’s important to make sure that you’re going to have enough coverage for your jewelry and valuables. Some home insurance policies only offer up to $1,000 or $1,500 for jewelry, so you might need to consider adding coverage for your valuables. It’s a good idea to check and see what kind of coverage the policy you’re considering offers.
6. Are my personal belongings covered for their actual cash value or their replacement cost value?
When you get home insurance, you should also see what kind of coverage your personal belongings will have. Are they going to be covered for their actual cash value or their replacement cost value?
Here’s the difference:
Actual cash value (ACV) will give you the value of the items at the time of the loss, meaning the depreciated value. (This may not be enough to replace the items at today’s prices.)
Replacement cost value (RCV) will allow you to replace your belongings at today’s prices.
7. Would raising my deductible lower my rates?
Your deductible is the amount that you agree to pay if you have a claim. You pay your chunk of the claim and the insurance company pays their chunk. There’s a connection between your home insurance premium and your deductible. If you set a higher deductible, you could see lower rates because you’re less likely to file a claim. So, if you’re financially comfortable with raising your deductible and you can afford to pay more money at any given time as a deductible, you could see lower rates. (Just don’t set it so high that it would be a huge problem if you had a claim.)
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