7 Questions For Your Home Insurance Agent
Shopping for homeowners insurance is just as important as shopping for the right home. When you’re first looking at buying homes, it pays to be in the know when it comes to home insurance, because the type of policy you can get should influence the location and condition of the home you buy. Here are seven questions and answers to ask a home insurance agent before you settle on your new house.
1. How are agents licensed?
Homeowners insurance companies only allow properly licensed agents to represent them, but there have been rare stories of agents who have sold worthless policies from fake insurance companies. Luckily, it is easy enough to visit the local state insurance department website to verify both agents and insurers by phone or an online search. Make sure you do so to ascertain you’ve got a reputable agent you want to work with before buying a policy.
2. Has a home had prior claims made?
Prior homeowners insurance claims may or may not factor into getting future coverage, but new homebuyers should always call an insurance agent in advance of closing to check. If a home has had several claims, it could impact future rates or even the ability to get coverage, so you may not wish to purchase it.
3. What does a homeowners insurance policy cover?
Typical home insurance coverage policies provide a package of protection, including property (the actual home and other structures), personal property (home contents), liability, loss of use and potentially natural disasters or other unforeseen events.
4. How much personal property insurance is necessary?
Most people underestimate the value of the personal property in their homes. Homeowners should use home inventory software to help you tally your possessions in case you ever need to make a claim. You should also understand the difference between having property valued at market or replacement value, and always have your policy cover replacement value.
5. How much liability insurance should homeowners buy?
Typical policies may include $100,000 to $300,000 worth of protection against injury or damage claims by others. People with high net worth may want to extend that with supplemental liability or umbrella insurance policies, and these usually only cost a few more dollars a month.
6. Does my policy include flood insurance?
Typical homeowners coverage does not include flood insurance, and this must get purchased separately. An insurance agent can help homeowners buy additional coverage against floods, or you could simply choose to put offers down on houses in areas that would not need it.
7. Is any type of water damage covered?
Water damage could come from storms, plumbing problems or even humidity. Mold does not need a lot of moisture to start growing, and it could even thrive in very humid areas. Ask an agent exactly what kind of water damage, including mold, the basic policy covers. Especially since many sellers may not be honest about the house’s predisposition to mold, it pays to be prepared.
It is always a good idea to know where you stand. When it comes to home insurance, take some time to consider what is covered, and identify areas in which you may need more coverage. Check out our Home Insurance Claims eBook regarding things that may or may not be covered under your current policy. Click on the eBook to download your copy!
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