5 Key Questions You Should Ask Your Insurance Agent

Are you choosing a new insurance policy? For many people, insurance is an ongoing headache. You may struggle to understand what you need from your insurance provider, or you might not recognize the difference between one policy and the next. Fortunately, by asking the right questions of your insurance agent, you can better prepare yourself to choose a policy and understand how the policy will protect you.

Question #1: What does homeowners insurance cover?

As a homeowner, you want to protect the investment you’ve made in your home. Homeowners insurance is an essential part of that protection. Many companies, however, offer different levels of protection based on the policy you choose. Don’t fall into the trap of choosing an insurance policy that doesn’t fully meet your needs! Instead, ask your insurance agent what your homeowner’s insurance policy covers and what you can expect from that coverage. What types of disasters are included in the standard policy? What types of perils can you expect the policy to cover? When you understand what your homeowner’s insurance policy covers, you can save yourself both time and money if disaster does strike.

Question #2: How much coverage does my home require?

Before writing a policy for your home, your insurance company needs to know all the important details about it. What’s the square footage of your home? How expensive would it be to reconstruct your home as it stands? Before choosing an insurance policy, you want to make sure that it adequately covers your home and provides the protection you would need to replace or make repairs to your property, regardless of the extent of the damage.

Question #3: How does the policy handle replacement cost versus actual cash value?

Over the years, many things in your home will depreciate in value. Consider an appliance: the actual cash value might drop as soon as you actually start using it, but the cost to replace it is much higher. Discuss with your agent which elements of the policy cover actual cash value and which ones include replacement cost. When possible, always opt for replacement cost value. It may cost more in premium, but it will ultimately be worth it when you have a claim.

Question #4: What is excluded from my policy?

Understanding what your policy does not cover is just as important as understanding what it does. Does your policy include flood insurance? How high is your liability coverage? What is that even for? What about an addition to your home or a brand new shed in your backyard? What if there is a break in the sewer line? What if water backs up into your basement or your bathroom? Make sure your policy is designed to protect as much of your investment as possible. Consider adding riders that can help increase your coverage if needed.

Question #5: How can I decrease my homeowners insurance costs?

You want the best possible coverage for your home, but you also don’t want to pay a fortune for it. Fortunately, you can do both. Talking with your insurance agent can give you a better idea of factors that might increase or decrease your homeowner’s insurance costs and how you can manage those factors. You might be able to lower or remove a rider that doesn’t do much for your coverage but adds substantially to the cost, or you might be able to add credits for alarm systems, safety features, and upgrades made. Talk with your agent to better understand how you can lower the cost while still getting the right coverage.

Choosing the right coverage for your home is critical, and talking with your insurance agent can help answer key questions and better prepare you to avoid financial disaster if you have a claim. Contact us today to learn more about how we can help you choose the right homeowner’s insurance policy for you.