Home Insurance Policies: Questions to Ask



Congratulations, you bought home! But now you’re probably facing an equally daunting task of finding the right home insurance for your new abode. But fear not, shopping around for home insurance coverage doesn’t have to be daunting! As long as you are well informed, you can feel confident about finding the right policy. When shopping around for home insurance, be sure to have these vital questions answered.

1. What does this policy cover (and what isn’t)?

This one might seem obvious, but it’s crucial that you are aware what disasters and incidents your house is and isn’t protected from. The language on home insurance policies can get a bit convoluted and confusing, and there may be amendments or exceptions to certain situations. You want to be well aware what these are. If there is a specific concern or scenario you have, run it by your insurance agent. And in the case of incidents, you’ll want to speak to your agent about the coverage as soon as possible.

2. What is the reputation of the insurance company?

Your home will likely be the largest purchase of your life, and most valuable of your assets. You will want to find a company that you can trust your asset to. Compare reviews and ratings of competing insurance companies, and take note of any red flags or concerns you have. Review any major public complaints or notable disputes, an average of settlement, and response time with the agents. If you’re considering a company with a lesser-known profile, you will want to check your state’s insurance department to confirm that a prospective company is licensed.

3. How much will it cost to rebuild my home?

Dwelling coverage is the part of your insurance that covers the structure of your home, and you want protection equal to or greater than your home’s rebuilding cost and not the purchase price. The price to rebuild your home is different than the price you paid for it.

4. What should I protect?

Most home insurance policies cover 50-70% of your personal possessions. Conduct a home inventory and keep a detailed list of everything you own, including prices of the items. You can ask how much of your personal belongings will be covered with your policy. And if you believe you will need more coverage for personal items, ask your agent about increasing the limit on personal possessions.