Simply put, everyone is different. The right insurance policy for your individual needs might not be the same as your neighbor’s, but purchasing the policy that fits the best is a wise decision that requires a certain degree of research.
Unfortunately, shopping for and customizing a property insurance plan that provides you with complete protection can be a confusing and overwhelming ordeal with little room for error, as purchasing too much or too little coverage can be a costly mistake. So, as an informed consumer, it is important you read in detail various home insurance policies and ask your insurance agent the right questions.
To help you become better informed and make sure you are getting the right coverage, here is a list of the more relevant insurance purchasing questions you can ask the next time you meet with your insurance agent.
Do I have enough insurance to rebuild my home?
The main function of having home insurance is to insure your home against total loss. In the event that your home is completely destroyed, your homeowners insurance policy needs to be able to cover the cost of building a new home from the ground up. That means that your policy should cover all the costs associated with the materials and labor necessary to rebuild. It is part of your agent’s job to be familiar with the value of the homes in your neighborhood to accurately calculate the cost to rebuild per square foot.
Do I have enough insurance to replace my possessions?
In addition to the dwelling itself, your homeowners insurance policy should cover the cost of repairing or replacing your personal belongings inside the home. Usually home insurance policies provide you with 50 – 75% of your dwelling coverage to protect your belongings. Conducting a home inventory of your valuables—jewelry, appliances, furniture—will let you know if that is sufficient coverage for your situation.
How much liability protection do I need?
Homeowners insurance does not just cover your home and its contents. It also protects you against lawsuits for bodily injury or property damage that you or members of your family—including your pets—cause to other people. This liability protection covers both court expenses and court awards up to the policy limit. Most liability limits start at $100,000, but if you are not sure how much coverage you need, be sure to ask your agent.
There might be other questions you come across when conducting your policy research, but this should be a good springboard to getting the conversation started and getting you informed. By educating yourself on the different sorts of policies and coverage amounts, you can not only purchase a policy that provides adequate coverage but also get peace of mind.