Purchasing homeowner’s insurance for a single family homeowner is not the cookie cutter, one size fits all that many of us envision. The coverage and cost needs to take into account not only the physical structure but its history, contents, your personal spending habits and property amenities.
That is why it is important to have an actual conversation with your insurance agent. And preferably, the conversation should be in the home you are looking to insure. Taking the agent on a tour of your property provides an important opportunity for both you and the agent to ask important questions.
While visiting your home, an agent can see if you have a pool with or without a fence, trampoline, swimming pool slide or even a skate board ramp that liability coverage could be excluded under the homeowner’s policy. The agent will also see if you have pets, especially vicious breeds, and suggest that you add animal liability under a separate policy.
But what questions should you be asking? Here are my top four suggestions:
1) What does a homeowner’s policy cover and what does it not cover?
The fine print is key in purchasing a homeowner’s policy. By taking an inventory of your possessions including big ticket items such as jewelry, fine arts, paintings and precious metals, you can discuss with your agent whether or not the homeowner’s company will add a jewelry floater on the policy by endorsement or whether you need to purchase a separate inland marine policy for those high valued items. By doing your own home inventory and discussing your replacement values of your more expensive possessions, you and your agent have a better idea if you need to purchase a separate floater in addition to the homeowner’s policy.
2) Will my policy cover the cost of rebuilding my home or my purchase price?
When you buy homeowner’s insurance as a new homeowner, you want protection equal to the full current insurable replacement cost value of the home structure, not the home purchase price. The cost of rebuilding after a hurricane, fire or tornado is different than the purchase price. By asking this question, you will be ensuring that you have sufficient coverage to rebuild your house after a natural disaster.
3) How does the past insurance claim history of my home affect the purchase of this new policy?
Knowing the past claims history is an important factor in determining future coverage for a new home buyer. If the property has sustained past sewage problems, you may decide to purchase water backup coverage. If you are not the original proprietor, you can obtain a copy of the Comprehensive Loss Underwriting Exchange (also known as CLUE) which is an amalgamation of all insurance claims submitted for the property. Knowledge is power.
4) Are there discounts available?
Your insurance agent is not a mind reader. Asking directly about discounts is one way to explore the possibility of saving on your insurance. Installation of security systems including burglar and fire alarms, hurricane impact resistive glass windows and doors as well as reviewing the age and type of roof may lower your premium and give you added protection as well as peace of mind.
Better Knowledge. Better Insurance Decisions. Better Results!