Homeowners insurance companies are there to help, yet a surprising number of homeowners have no idea what their policy covers. According to a recent ValuePenguin study, about 47% of homeowners have no idea what their insurance plan covers. Homeowners insurance companies want you to understand your policy and suggest that you ask these three questions to get some clarity.
Before You Ask a Question Do This
An alarmingly high number of homeowners never read their policy documents that come with their homeowners insurance. There is a wealth of information contained in these documents that can answer a lot of your questions and make you really familiar with your coverage. Read your documents and then contact your homeowners insurance company to address any questions you have after reading the documents.
How Much Is My Deductible?
Knowing how much you have to pay out of pocket is essential. A deductible is the share that you will have to pay before your insurance company payout on a claim. Deductibles can vary greatly. It is important that you know what your financial responsibility is in case of a fire or another covered event.
Understanding your deductible is also an important factor when you are deciding to file a claim. For example, you may have a $500 deductible and $550 worth of damage. Filing a claim may not be the best option in this scenario. Ask about your deductible and how it works.
What Are the Limits of Liability?
The limit of liability is how much you will be paid by the insurance company in the case of total loss. It is important to fully understand what the maximum payout the insurance company will give you in the case of a total loss because if you lose your home you want to be able to either rebuild or buy a new one. The limit of liability will affect your ability to do both.
What Changes Do I Need To Make?
A lot of homeowners make the mistake of a one-and-done approach with the homeowners insurance companies. They take out the policy and pay for it regularly, but they never revisit the policy to make changes and improve their coverage.
As your property improves, so should your coverage. Check in once and while with your homeowners insurance to make sure you have the best coverage for your needs. Stay on top of your homeowners insurance to avoid any unwanted surprises.