Do you need home insurance? If you want to buy a house, you will need a policy, and you will also need one if you already own a home. You can purchase a home insurance policy from any insurance company you choose, but you should always ask some important questions before choosing a company and policy. Here are some great questions to ask when buying or updating a home insurance policy.
What Coverages Come with a Standard Policy?
You can customize your home insurance policy to meet your needs, but a standard policy comes with four main things. The first thing is structural coverage, which protects your home structure. The second is personal property, which covers the things you own inside and outside your house.
A typical policy also provides liability coverage, which protects you from lawsuits that might arise from incidents on your property. The fourth thing it may include is additional living expense (ALE) coverage. ALE compensates you for extra expenses you incur if home damage forces you to move out of your home for a while. You can ask your agent if these coverages come with the policy that you have or want.
What Perils Does It Cover?
The next question to ask is about the covered perils. A typical home insurance plan will not cover damage from all perils, but it might cover the damage you might experience from some. Most general plans include damage from wind, storms, ice, and fires. They typically do not cover damages that arise from floods and earthquakes. You can add extra coverage to your plan, though, such as sewer line coverage. If your sewer line breaks and damages your home, having sewer line coverage offers compensation for the repair costs.
Should You Purchase Flood Insurance?
You might also want to discuss the option of flood insurance. While your home insurance agent might not sell flood coverage, they can recommend it if they think you need it. The main thing they must find out is if you are in a flood zone. If your home is in a flood zone, you might be legally required to buy flood insurance. If you are not in a flood zone, you can still purchase coverage for flood damage, but it would not be legally required.
How Much Structural Coverage and Personal Property Coverage Should You Have?
You can also discuss some coverage levels with your agent. The main one to discuss is the amount of structural coverage to have with your plan. The best way to determine this figure is by considering the cost of rebuilding your home. If you had to rebuild your house today, how much would a contractor charge you for it? Once you know the answer to this question, you will know how much structural coverage to have with your plan.
What Is the Right Deductible?
The final question that you should always ask is about the deductible. Your home insurance plan will have a deductible, which refers to how much out-of-pocket costs you will pay if you file a claim. A lower deductible is easier to afford if you have to pay it, but it will result in higher premiums for the policy. A higher deductible might be more difficult to pay if you file a claim, but you will save more money on your policy premiums if you choose a higher amount.
If you need home insurance or want to update your policy, contact a home insurance agent. You can ask these questions and others when you call to ensure that you get the right coverage for your plan.
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