Let’s say you want to protect your home and valuable possessions inside it with a home insurance policy. You can choose from dozens of different policies offered by various insurance companies. Before you sign on the dotted line, here are 9 questions you must ask your home insurance agent.
1. What type of insurance is your home covered under?
Home owners can choose from 7 types of home insurance policies. For example the HO1 policy is a basic form of homeowners insurance, while the HO8 policy is designed for older houses, while HO4 is offered as renters’ home insurance. Find out what type insurance you are being offered, and exactly what is insured under your policy, and who is covered by it.
2. Is the coverage sufficient for your needs?
Go through your insurance documents to see if all the assets that you consider valuable, like the building and the property contained within, are adequately covered. Unless you verify this, you could face considerable losses when it’s time to file a claim. Remember that even if you lose your home to some accident, you’ll still owe your bank the mortgage on it. Without a comprehensive cover, you are exposing yourself to serious financial risk.
3. What is your deductible?
For all insurance claims, the claimant is expected to pay an initial amount known as the deductible. If an insured item worth five thousand dollars is damaged or destroyed, and you have agreed on $1000 deductible on the same, then you are expected to pay $1000 before the insurance company pays the rest to replace the item. The higher your deductible, the lower will be your premiums. It is often better to choose a higher deductible than pay a large sum as premium.
4. What is excluded under your homeowner insurance policy?
Get specific answers on all items that are not covered under your policy. This should be clearly spelled out in your policy document. If you do not understand any clause or language used in the document, get them clarified. A number of customers end up feeling cheated because they fail to understand the legal jargon used in the policy document.
5. Are your monthly premiums affordable?
Get quotes from different insurance companies to find a deal that you can afford. Make sure your premium payments are within your monthly budget. Talk to your agent about payment terms. But there is no reason to stick with one company when others are willing to offer lower prices for the same coverage.
6. Are natural disasters covered?
A basic homeowners insurance policy does not cover natural disasters, which doesn’t matter for most homes. But some areas are prone to calamities like earthquakes, hurricanes or floods. And if you live in one, you may want to have additional clauses protecting your home against damages caused by such events.
7. To what extent will you be compensated?
Find out your insurance coverage options in case of damage or destruction. There are two – replacement value and market value. If you are covered under the market value clause, then the insurance company will pay the market value of the property. Under the replacement value policy, the company only pays for the cost of replacing the original property. For home owners, choosing the market value policy is a better option.
8. Do safety features qualify for discounts?
If your home is well-protected against fire, theft and other problems, then you can ask your agent if you qualify for discounts on your insurance premium. Companies usually offer discounts because your home is less risky to insure.
9. How long does it take to settle claims?
Most insurance companies advertise 24-hour claims settlement policies. Check to see if they really live up to their promise. Look at records for complaints that customers have filed against the company. If there are too many complaints about delays in claims settlement, then probably the company is not prompt in making payments.
The above questions will guide you to choose the right kind of home insurance. Take the time to research and understand all clauses and variables so that you are not left holding worthless paper when the time comes for settling claims.
The author of this article Sam Jones advises people that when they go compare insurance quotes at uSwich.com price comparison site, they will be offered a huge range of choice from a big list of providers
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