Choosing the best insurance coverage for your home is a big decision. One way to make it easier to find affordable home insurance is to work with an insurance agent. These professionals can guide you throughout the entire process while comparing quotes from all of the major insurance providers. An insurance agent will help you find the best available coverage to meet your needs and budget. Asking a few questions is also important in helping you understand the details of your policy.
Here are a few of the top questions to ask your insurance agent.
What Does a Standard Insurance Policy Cover for My Home?
Understanding the details of your home insurance is important before you choose a policy. A standard insurance policy will cover the structure of your home if it’s damaged by hail, lightning, fire, hurricane, or any other disasters listed on your policy. Most home insurance policies will also cover any detached structures, whether it’s a gazebo, garage, or tool shed. On the other hand, a standard policy won’t pay for damages due to flooding, earthquake, or neglect.
A standard insurance policy will also cover your personal items if they were stolen or destroyed due to an insured disaster. Creating a home inventory list is recommended to help you determine if you have enough coverage or if you need any add-ons. You may need to consider additional coverage for more expensive items, such as artwork, jewelry, collectibles, or furs. Liability protection is also included in a standard home insurance policy, as it helps to protect you from lawsuits involving property damage or bodily injury.
Additional living expenses (ALE) are also available in a standard policy. This coverage will cover the costs of hotels, restaurant meals, and other items while you are waiting for your home to be rebuilt. However, ALE coverage often has limits, as some policies will only allow you to use this coverage for a set amount of time. An insurance agent can help you look over all of the details of your policy to make sure you fully understand everything.
How Do Insurance Providers Calculate Rates?
Insurance providers calculate numerous factors to determine the cost of your home insurance. A few of the biggest factors impacting the cost of house insurance are the replacement costs, the age of your home, and the square footage. For example, an older home will be more costly to insure due to it usually being more expensive to rebuild. The construction materials also play a key role in determining the cost of insurance, as masonry homes are much cheaper to insure compared to wood.
A larger household will also be more expensive due to the increase in potential liability risks. Your insurance rates will also be higher if you have many previous claims on your insurance or if you live in an area with a history of numerous claims. Fortunately, you can lower the cost of your home insurance in a variety of ways, such as investing in a security system, installing deadbolt locks, or improving your credit score. Raising your deductible is another way to save money on your insurance, as an insurance agent can help you choose the best option to meet your needs.
Should I Select Replacement Cost or Actual Cash Value?
Deciding between replacement cost or actual cash value is another key decision for homeowners. Actual cash value includes depreciation while settling claims for personal property. For example, if you bought a new TV for $400 five years ago and it was destroyed in a house fire, you won’t be reimbursed for the total costs. Instead, an approved claim will allow you to receive a reimbursement for its current estimated value minus your deductible, which will be much lower than the original amount.
While actual cash value policies provide less coverage, they are usually a much cheaper option. On the other hand, the replacement cost value for your home doesn’t factor in any depreciation or wear and tear. You will be reimbursed the full amount of how much it costs to either replace, rebuild, or repair your property at today’s costs. Of course, your deductibles and policy coverage limits will still apply to either one of these policies. Discussing all of your options with an insurance agent can help you choose the best coverage for your situation.
How Much Should I Set Aside for My Deductible?
Selecting the deductible on your home insurance policy is another important decision. The deductible is the amount you will need to pay towards a claim before the home insurer covers the rest. You can either choose between a preset dollar amount or a percentage of the value of your home insurance policy. The dollar-amount deductible is a fixed amount that needs to be paid before you can file for your home insurance. Typically, $1,000 is the most common deductible, but a deductible that’s $500 or $1,500 is also a standard choice.
On the other hand, you can choose a percentage deductible that’s based on a percentage of the insured value of your home. For example, if you have a 1% deductible on a home that’s insured for $300,000, you will need to pay $3,000 before receiving a payout on your home insurance. Ultimately, it’s important to select a deductible that you can afford to pay if you ever need to file a claim. An insurance agent can help you compare all of the pros and cons of a higher deductible to determine the best option for saving you money without sacrificing too much of your insurance coverage.
What Is Not Included in My Insurance Policy?
Understanding your home insurance coverage is key before you make any decisions. A standard home insurance policy most likely won’t cover any earthquake or water damage to your home. However, you can buy earthquake insurance as an endorsement. Flood insurance is available as another policy with the National Flood Insurance Program (NFIP), or you can use an insurance agency. Other kinds of water damage are also not covered in a standard home insurance policy, such as overflows from your sewer system or backups from your drains.
Keeping your home well-maintained is also important in avoiding problems, as negligence isn’t covered in a standard policy. For example, damages caused by termites, rodents, mold, rust, or rot aren’t usually covered by your home insurance. Any hidden defects or mechanical breakdowns also won’t be covered. Reading over the details of your policy and asking questions to an insurance agent is essential in helping you understand what is and isn’t covered by your home insurance.
Will I Need To Buy Flood Insurance?
Flood insurance may be a requirement by your mortgage lender if you are living in a moderate or high-risk flood zone. Even if it’s not a requirement, buying flood insurance is often a good idea for anyone living in Florida. The cost of flood insurance can often range anywhere from $200 to $2,000 for most homes. The cost of flood insurance is calculated on numerous factors, such as the elevation of your property, distance to the coast, and the building materials used for your house. You can either buy flood insurance through the NFIP or an insurance agent.
Should I Consider an Umbrella Policy?
Umbrella insurance extends your liability insurance to provide additional coverage for situations with higher limits. Most umbrella insurance policies start at $1 million, and they can even reach up to $10 million. Typically, you can expect to pay between $150 to $300 each year for umbrella insurance. It’s often a good idea to buy umbrella insurance if your liability limits are lower than the value of your overall assets.
An umbrella policy can cover a wide range of situations, such as liabilities in excess of your home insurance policy limit, malicious prosecution, slander, legal defense expenses for covered losses, and much more. However, umbrella insurance does exclude a few situations, such as your own injuries, property damage while doing business activities, or any liability assumed within a contract. An insurance agent can work with you to determine if umbrella insurance makes sense for you.
Do I Need To Update My Policy After Performing Renovations?
Many homeowners make the mistake of not updating their insurance policy after completing renovations on their homes. Upgrades to your home can often increase its value, as you may be underinsured due to the higher cost of replacing your home if it’s ever damaged. Some renovations can significantly increase the value of your home, such as updating your kitchen with new cabinets, appliances, and countertops.
It’s also possible that performing renovations on your property can save you money on your insurance, such as building a fence in your backyard. Any renovations that create a safer environment can often result in discounts on your home insurance policy. Discussing everything with your insurance agent can help you determine if you need more coverage for your home or if you are eligible for any discounts.
Searching for an Insurance Agent? Contact Wellcovered Insurance Today!
Wellcoverd Insurance partners with more than 30 of the top insurance companies across the nation. Our insurance agents can help you find the best home insurance coverage to fit your needs. We also provide several other insurance options, whether you are in the market for auto, RV, boat, condo, commercial property, business owner’s policy, and much more.
Providing the best customer experience is always our goal, as you can receive a home quote in one or two business days, and an auto quote only takes around 15 minutes. You are also more than welcome to visit our office if you have questions or need to make changes to your insurance coverage.
Our business also prides itself on staying active throughout the local community. We are both members of the Deland Breakfast Rotary and the West Volusia Regional Chamber of Commerce.
Feel free to give Wellcovered Insurance a phone call today to get in touch with a local insurance agent!
