Roberts-McClure Insurance - Home Insurance

How To Buy Home Insurance

I'm buying home insurance for the first time, and want to make sure I have the right coverage - at the best price, of course. What should I ask my insurance agent or broker before buying?

While curiosity may have killed the cat, when it comes to buying insurance, one can never be too curious! Coverage can vary from one company and policy to another, so it pays to ask questions before you buy. While this list isn't meant to be exhaustive, it will start you off on the right track.

What kind of damage is covered?
Some policies cover only "named perils" - in other words, if the "peril" (cause of the damage), isn't listed on your policy, it isn't covered. Other policies cover named perils on the contents of your home and "all risks" on the building. "All risks" provides insurance for more causes of loss than named perils. But instead of listing what is covered, an all risks policy lists what is EXCLUDED, or NOT covered. Still other policies cover all risks on both the building and its contents. But no policy covers everything that could go wrong.
What kinds of things could happen to my property that aren't going to be covered, unless I make special arrangements?
For example, if you live in an earthquake zone, you might want to consider buying earthquake coverage; if you are worried about water damage from a blocked drain, you might want sewer back-up coverage; if you have a home business, you will need special coverage for that. Ask your insurance representative about other kinds of damage for which you may want to purchase additional insurance.
What is the deductible? Give me the price with some different deductibles.
The higher the deductible, the lower the premium. Compare the premium with different deductibles, and then decide whether the lower premium is worth the higher amount you would have to pay out of pocket if you had a claim. For example, if you save $100 on your annual premium by raising your deductible from $500 to $1,000, you would have to go more than five years without making a claim on that coverage to benefit from choosing the higher deductible.
Are there certain items that are subject to limits on insurance payments, for which I might want to buy additional coverage?
Certain items like jewellery, watercraft and furs, to name just a few, are subject to specific dollar value limits if they are lost or damaged. You may want to buy additional insurance to provide a more appropriate level of protection.
Am I entitled to any discounts?
Many insurance companies offer discounts to policyholders that have newer homes, have installed safety features like smoke detectors and burglar alarms, and have made no claims for a certain period of time. Make sure you get all the discounts to which you are entitled.
On what basis are claims going to be paid?
Most claims on home policies are paid on a replacement cost basis, meaning that the insurance pays the cost of replacing the damaged or lost item with a new one that is as close to the original as possible in functionality and quality. However, some policies may pay only actual cash value, which means replacement cost LESS depreciation. Of course, you have to actually replace the item in order to receive replacement cost for it.

Remember, there's no such thing as a dumb question, so don't hold back!

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How To Buy Home Insurance