Tuesday, September 26, 2023

Insure This: 8 Questions to Ask Your Insurance Company (Now!)


About 95 percent of US homeowners have homeowners insurance. This makes homeowners insurance one of the most popular insurance types in the country.

It’s easy to see why a homeowner would want to insure their property. A home is probably the biggest investment you’ll ever make in your lifetime. When you’re spending hundreds of thousands of dollars or more on a piece of property, you want to safeguard it against potential hazards, including vandalism, fire, and severe weather.

To ensure you’re getting the right policy for your home, there are certain questions to ask your insurance provider. Whether this policy is for your first or fifth home, it’s essential that it matches your current needs.

In today’s post, we outline the top questions to ask your insurance company, so you have no second thoughts about your insurance policy. Keep reading to learn more.

1. Do I Really Need Property Insurance?

You’re not required by law to buy homeowners insurance. But if you financed your home’s purchase, then it may be mandatory for you to get an insurance policy. Banks and other lending institutions require you to insure your home because they have a stake in the property.

Of course, it also makes much sense to insure your home even when you didn’t acquire it through a mortgage. Disasters are unpredictable. When you have property insurance, you’re assured of getting much-needed help to rebuild the damaged areas of your property.

2. What Hazards Does This Policy Cover?

Generally, a standard homeowners insurance will compensate for hail, windstorms, lightning, smoke, vandalism, or an explosion that damages your home. The policy will also cover losses you incur in the event of a burglary.

Following any of these occurrences, your insurance company will dispatch independent insurance adjusters to document all the losses covered by your policy. This step is necessary for your insurance company to determine how much to pay for repairs.

3. What Exclusions Are There in This Insurance Policy?

Another question you want to ask your property insurance company is what incidences aren’t covered by your policy. Understand that a standard homeowners insurance policy doesn’t pay for damage caused by every natural disaster that hits your home. Earthquakes and flooding are two of the biggest exclusions.

Depending on where your home is located and the natural disasters likely to strike it, go through your policy carefully to ensure you’re covered. What addendums should you consider tacking onto your policy to stay on the safe side?

4. Does the Policy Cover Replacement Costs for Valued Possessions?

If you have valuables, this is one of the must-ask property insurance company questions. Keep in mind that there’s a big difference between a property insurance policy reimbursing at market value and the policy paying the actual replacement cost. Be aware that most policies max out at a certain value.

If you own luxury items such as art or fine jewelry, enquire what limits your insurance policy places on such valuables. Knowing about these limits helps you know whether you need more coverage or not.

5. What If Someone Is Injured in My Property?

If a guest slips and falls in your home, getting injured in the process, you want to know whether your homeowners insurance policy will take care of the medical and legal bills that arise as a result. Generally, property insurance covers these occurrences. However, there’s a limit to the amount the insurance policy will cover.

The maximum amount your insurance policy will cover in damages and legal bills is indicated in your policy’s liability coverage section. Ideally, you want the upper limits of your liability coverage to be high, so your personal pocketbook doesn’t take a big hit when injuries happen on your property.

6. How Much Homeowners Insurance Is Enough?

The best way to determine your property coverage limits is to find out how much it would cost you to rebuild your home after a disaster. Sometimes, this is based on your property’s current market price, although it could climb higher.

Consider insuring over your home’s market price if the house is older or has other structures on the property, such as a backyard shed or garage. High construction costs in your area are also an indication that you need a higher coverage limit.

The amount of coverage you take will determine how much you can expect to pay annually. Currently, the average homeowners insurance premium in the US is about $1,200 per year.

7. How Can I Reduce My Premiums?

Pay well over a thousand dollars a year on home insurance can seem a little high for many homeowners. Thankfully, there are ways to reduce your premiums.

You can opt for a higher deductible. That’s the amount you can comfortably pay out of pocket when a disaster strikes our home and you need to rebuild. The higher the premium you opt for, the lower your premium will be.

Inquire whether your insurance provider offers any credits you can take advantage of. Many property insurance providers offer credits for safety additions in your home, such as smoke detectors, alarms, and so on.

8. What Does the Process for Filing a Claim Look Like?

After a disaster, you want to get back to your normal life as soon as possible. You want to work with an insurance provider who makes the claims process an easy one for you. That’s why it’s crucial to know what to expect when the time for making a claim comes before you sign any papers.

Find out how long the property insurance provider takes to pay claims. Do they guarantee to remain communicative throughout the process? Working with an insurance provider who you can’t reach when you need them the most is a nightmare.

Find out what the insurance provider expects from you to make the claims process quicker. Most providers require proper documentation of your personal property to ease the claims settlement process.

Know the Right Questions to Ask Your Insurance Company

Making assumptions regarding your property insurance policy can lead to frustrations years down the line. That’s why it’s essential to understand everything before signing any contract. The best way to do so is by knowing which questions to ask your insurance provider during your first meeting.

Would you like to read more content on property insurance? Keep reading our blog!