Before buying the home of your dreams and finalizing everything with your mortgage lender, there is one thing you need to get: a home property insurance. Finding the right insurance coverage is not easy, but it can be done. Find the home insurance policy that will best suit your needs by asking the following questions:
1. How much home insurance will I need?
Understandably, you want to ensure you are buying the right amount of coverage. Too little, and you might not have sufficient coverage to protect your home. Too much, and you’d have to think twice if you are being scammed.
Home insurance plans offer different levels of protection. Actual cash value is the first level, and it covers the value of your home and your belongings, taking into consideration the cost when they depreciate over time.
Replacement cost is the next level of coverage, and it covers the home’s actual cash value. However, it does not take depreciation into account.
2. How are my insurance rates calculated?
Several factors are considered in the calculation of your home insurance rate. One of the most critical factors is your personal claims history. The condition of your property is also another essential factor. If you have a large home, it is expected that the replacement cost is also higher. This translates to higher home insurance rates as well.
3. What should my deductible be?
The amount you have to pay to handle a claim before your insurance company covers the repair cost is called a deductible. For example, if your deductible is set at $1,000, that will be the amount you will shell out to handle claims before your insurance provider gets involved.
4. Will I need flood insurance?
Where you live will influence the type of coverage you’ll go for. For instance, if you live in an area that often has exceptionally wet weather, it is ideal to get a separate flood insurance policy. In some cases, you might be required by your mortgage lender to get one.
5. What does a typical homeowners insurance policy cover?
Most conventional homeowners insurance policies come with four basic types of coverage:
- Liability coverage – covers costs related to bodily injuries sustained by someone in your home.
- Dwelling coverage – covers the physical structure of your home.
- Personal property coverage – covers the personal belongings found inside your home.
- Additional expenses coverage – covers living expenses (i.e., transportation, hotel costs, etc.) that comes up if you are displaced from your home.
6. What are policy limits?
A coverage or policy limit pertains to the maximum amount providers will pay for a claim. This means if you own a home worth $500,000, the dwelling coverage limit is equal to the replacement cost of your home, which is at $500,000.
7. Will I need an umbrella policy?
Think of umbrella insurance as an extra layer of protection in case of a massive insurance claim. Say you get sued for someone’s bodily injury while in your property. If the legal fees exceed your homeowners policy’s liability limits, an umbrella insurance can come in handy.
8. Will my home be inspected before I can get home insurance?
In most cases, your home is inspected before you can purchase home insurance. The inspection is for the insurance company to assess the risks in your home and calculate your rates accurately.
9. Is my homeowners insurance tax-deductible?
Generally, homeowners insurance is not deductible. However, there are a few exceptions. For instance, if you are running a business out of your home, you might deduct some of the insurance cost when the time to file taxes comes.
10. How will I pay my home insurance premium?
There are various ways you can reduce your home insurance premium. Shopping around is one. When comparing quotes, take into account the deductibles, range of coverage, and limitations (also referred to as exclusions) as they can differ from one insurance provider to another.
Another effective way you can reduce your insurance premium is by purchasing homeowners and automobile insurance from the same company. Some insurance companies might take at least 5 to 15 percent off your premium if you purchase two or more policies.
When shopping for home insurance, ensure you will get the coverage you want at fair value. Start by contacting Petley-Hare today, we’ll compare quotes across all of our insurance markets and make sure the process is simple and straightforward. From there, making an educated decision should be easy!