Questions to Ask About Homeowners Insurance

Below are some important questions to ask when shopping for homeowners insurance.

1. How much would it cost to rebuild your home in its existing location in the event of a total loss? You want your policy to provide for total reconstruction. Normally policies cover damage from fires, hurricanes, hail, lightning and any other disaster listed in the policy. Generally, coverage for earthquakes or floods must be purchased separately.

2. Should you buy separate earthquake and flood insurance? Flood coverage isn't as widely available as earthquake insurance, which you can usually get as a supplemental policy from the same company that is issuing your homeowners policy. Should your company not offer flood insurance, you can get it from the federal government's National Flood Insurance Program.

3. How much is your personal property worth in the event of a total loss? Many policies cover personal property at a set percentage of the total amount of insurance on the home, usually around 50-70 percent. It should cover personal property losses that occur either from theft or any of the covered natural disasters. As a homeowner, you should have a good idea of the value and inventory of the contents in your home.

4. How much liability protection do you need? Liability covers owners against lawsuits from property damage or bodily injury (including animal bites) caused to other people anywhere. So if your dog bites someone while you are walking her and you get sued, your homeowners policy will cover that. The costs of legal defense and any damages awarded to injured parties is covered by the liability aspect of the policy up to the set amount in the policy. Liability coverage usually starts at $100,000, but the more assets you have, the more insurance you should get.

5. How much additional living expense coverage do you need? This coverage is needed when your home becomes uninhabitable because it covers the cost of alternative housing, meals and other living expenses. Many policies offer this coverage at 20 percent of the amount of coverage on the home. Also find out if there is a time limit on how long you can take advantage of this coverage.

6. Do you qualify for any discounts? Discounts can be given for lots of reasons, including your age (55+), having sprinkler and alarm systems, or updated electrical and plumbing systems. Just ask!