Questions You Need to Ask When Buying Home Insurance


Buying a home is probably the most expensive purchase for most people, which is why thinking about the inherent risks the come with homeownership can feel a little unsettling. But while home insurance exists to protect this valuable investment and offer homeowners some peace of mind, it has its share of difficulties as well.

You’d think getting home insurance coverage is the easiest thing in the world – just fill up the paperwork, sign above the dotted lines, and then your home’s protected. But the truth is, it’s a much more complicated process than that.

Having the right type and amount of coverage is essential to protecting your home and your belongings from any future disasters and unexpected events. Whether you’re a first-time homebuyer or a long-time homeowner renewing a policy, make sure to ask your home insurance agent these questions first before buying a home insurance policy. 

What are the monthly premiums?

One of the first and most important questions you need to ask an insurance agent is the price of their premiums. Monthly premium refers to the amount you’ll pay every month for your homeowners insurance.

Consider asking several insurance companies for a quote of their premiums. Compare prices and level of coverage, and settle on a deal that offers excellent value for your money. 

Will I be able to rebuild my home from the ground up with this amount of coverage?

Your insurance policy should allow you to rebuild your home completely. For a more accurate estimate of your home’s reconstruction costs, work with a local agent who is familiar with the construction costs and prices of construction materials in your area. Also, don’t forget to inform the agent of any recent upgrades or renovations on your home. These may increase your home’s value and require additional insurance coverage.

It’s recommended to purchase a policy that covers at least the same amount as your home’s estimated replacement cost.

Are my possessions and belongings covered in case of a total loss?

You may insure your belongings for either their replacement value or market value. In case of theft or loss, replacement value coverage will compensate you with the amount it costs to replace the items. Actual value coverage, on the other hand, will pay you for the current price of your belongings and takes into account its depreciation value.

Typically, your belongings are insured for 50 – 70 percent of your home’s structural coverage. To determine whether you have enough personal property or not, perform an inventory of your belongings and get an estimate of how much it will cost to replace them.

Am I covered in the case of a natural disaster? What’s not included in my policy?

This is an important question to ask the agent, as most home insurance policies do not include earthquakes and other natural disasters like flooding. However, if you live in areas where with a high chance of experiencing floods, earthquakes, or hurricanes, it’s wise to purchase additional or special insurance for these events. 

Do I have enough liability coverage?

When you include liability coverage in your homeowners policy, you’re protected from any damage that you, your family members, or pets cause to another person or property. Most companies begin their liability limit at $100,000. However, insurance providers might ask you to purchase a higher level of liability protection if you have greater assets. 

How can I avail of discounts?

As you shop around for homeowners insurance, remember to ask the different companies if you’re qualified to receive any discounts. Some features in your home – like dead-bolt locks, burglar alarms, smoke detectors, and sprinklers – may entitle you to a discount. Some companies also offer homeowners aged 55 or older discounted premiums. 

Is your company in good financial shape?

While this question does sound a little blunt, you need to make sure that you’re buying home insurance from a company that can cover your claims. But then again, any agent you ask will probably answer “YES.” Consider verifying the company and whatever information they give you with the National Association of Insurance Commissioners Consumer Information Source.

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