The 9 Essential Questions to Ask Before Choosing a Home Insurance Provider:
Finding a home insurance provider that meets your needs is essential first step in starting your life in a new home. Home insurance offers peace of mind and provides protection. However, working with the wrong insurance provider can result in high deductibles or missed coverage in filing a claim.
Make sure to ask these 9 homeowners insurance questions before you take out your next insurance policy.
1. What Tiers of Home Insurance are Provided?
There are eight levels of home insurance offered in the United States. Ranging from HO-1 to HO-8, insurance companies provide different options that vary depending on your home.
Homeowners, renters, mobile home owners, and condo owners have different policy options. The first question you should ask any provider is if they offer the type of insurance you need. Tell them whether you own or rent. Tell them what type of circumstances you wish to have covered. Let them know if you’re looking for a basic policy or a broad one. Ask them to explain the differences between each tier so you can make an informed decision.
2. What are the Deductibles?
Different levels of home insurance have different deductibles. They also have different premiums. Low premiums (the amount you pay per month) go hand-in-hand with high deductibles.
The less you pay each month, the higher deductible you’ll need to pay when you put in a claim. If you pay a higher monthly premium, your deductible will usually be lower.
Based on your income and budget, gauge the risk and reward of having a low premium or a low deductible. Ask your provider what your options are. Decide if you want to pay a lot now and little later or less now and more later on. You’ll have to do the math to figure out which is the most affordable option for you.
3. Do You Cover Personal Items?
Some insurance policies just insure your property. Others insure your property and personal items. If personal belongings are covered, ask for the details.
Certain items may be covered, while some items might be excluded. For example, if you have expensive jewelry, antiques, or art, make sure your policy covers these specific items.
Don’t wait for an emergency to happen to ask this question. You won’t be able to get that coverage after the damage has taken place in the event that your valuable possessions are excluded from coverage.
4. Are Discounts Offered For Packaging Policies?
Packaging insurance policies together can save you money. Ask if there is a discount for bundling home insurance and auto insurance into one policy. In some cases, you can lower your monthly premium by carrying two policies with the same insurance provider.
If you require business insurance, supplemental health insurance, or boat insurance, ask if those can be bundled in as well. Insurance companies want your business. The more business you give them, the more likely they are to give a discount for doing so.
5. What Do Previous Customers Have to Say?
Don’t ask the insurance company this question, ask the internet. Look for feedback and comments on Yelp, Facebook, and Google My Business. See what other customers are saying. Every business will have a few unhappy customers. However, the best insurance providers will also have countless positive reviews.
Consistent negative reviews should serve as a warning sign. This is a great way to learn how the provider conducts business and handles customer service. Before you sign with a new insurance provider, do your homework to see how other customers feel about their policies and services.
6. Is There a Non-Smokers Discount?
Smoking indoors can increase the risk of a fire-related hazard. Let your provider know if you are a non-smoker. This may qualify you to receive any incentives or discounts on your monthly premium.
7. Do They Provide Replacement Costs or Provide Cash Value?
In the event of a fire, theft, or other serious damage, you’ll want to submit a claim to replace valuable items. Some policies provide replacement costs so you can buy brand new items to replace the ones that have been damaged. Other policies provide cash value based on the depreciated cost of an item.
Let’s say you spent $1,500 on a brand new laptop two years ago. If your policy offers replacement costs, you’ll be able to go out and buy a brand new laptop. If your policy provides cash value, you will only be reimbursed for the current value of the item. In other words, your $1,500 laptop may be replaced with $500.
With better payouts, you can expect higher premiums or higher deductibles. Weigh your options to determine which is right for you.
8. Is Water Damage Covered?
If you live in a high-risk flood zone, it’s a good idea to have flood insurance. While it may not be required, it is highly recommended by the National Flood Insurance Program to get this extra coverage.
If your insurance provider does not offer flood insurance, you can get this through the National Flood Insurance Program. Expect to pay an additional monthly fee for the extra coverage.
9. What Is Excluded?
Don’t sign up for a new policy until you have a clear understanding of what is and isn’t included in the policy. Ask what items are covered. Ask what items are not covered. Know exactly how claims need to be filed. Ask how long it usually takes for a claim to be approved. Make sure you do your research before entering into any binding agreements.
Don’t be shy when it’s time to ask questions. A good insurance agent will take the time to answer your questions thoroughly and honestly. If you’re not getting the level of service you need, find a new agent that can provide you with a policy that meets your needs and meets your budget.