Posted on: 18 September 2020
Having homeowner's insurance is not an option if you own a home, but you get the option of choosing your coverage types and amounts. As you prepare to buy a policy, you might wonder what questions to ask the agent. If you are wondering about this, here are three good questions you should consider asking.
How Much Structural Coverage Should You Buy?
One of the main things a home insurance policy covers is the structure of your house. The question is how much coverage you choose for the policy. Should you choose the amount that you paid for the house? Should you choose the home's appraised value? You can choose either of these amounts, but the best option is to choose the replacement value of the house. You might want to ask a contractor how much it would cost to rebuild your home if you lost it. Once you find out this amount, you might want to use it as your structural coverage value. If you use this amount, you can be certain that your policy will provide plenty of coverage if you experience a total loss.
Does the Policy Use Replacement Value or Actual Cash Coverage?
The second thing to ask is about the method the insurance company uses to determine compensation. They may use replacement value or actual cash value, and you should find out which one they offer. Replacement value is the better option, as it provides compensation for you to replace any items you lose to a covered peril. Actual cash value only compensates you for the actual value of the lost items. Actual cash value considers the depreciation of the items, so you always receive less for them.
What Deductible Should You Have?
The third vital question to ask is about the deductible on your policy. If you have home insurance, you will have a deductible. The deductible tells you the amount of money you must pay when you file a claim. You must pay this amount first, and then the insurance company picks up the rest of the tab. You can choose a low deductible to pay less when you file a claim or a higher deductible to save money on your premiums. You can ask an agent what the best option is if you have questions.
Do you need home insurance? If so, contact an agent that provides home insurance to find out more about it.Share