Many people don’t understand how important it is to ask the right questions before buying home insurance. There are many different factors that go into deciding which policy is right for you, and these four questions will help get you started. What type of coverage do you need? What’s the deductible? How much can you afford to pay? And what’s the maximum payout? Asking these questions before you buy will help make sure you’re getting the best deal on home insurance.
What Type Of Coverage Do You Need?
When you’re buying home insurance, there are four basic types of coverage to choose from. These are named perils, broad form, special form, and all risks. Named perils are the most common type of policy but not necessarily what you need. When your house is damaged because it’s struck by an automobile or vandalized, you only receive compensation for that specific incident if you have a named perils policy. If you’re in Toronto, you can check out some of the homeowners insurance Canada companies and understand what they offer. All risks cover full replacement costs for all damages to the structure itself while broad form and special form policies provide additional coverage. If you want to be compensated for the total cost of rebuilding your house following a natural disaster, then you need an all risks policy.
What’s The Deductible?
After choosing the right type of coverage, you need to ask how much each deductible will be if your home is damaged during a covered accident. In some cases, this could be as little as $200 but it can rise as high as several hundred dollars or even thousands depending on the payout limit that you choose for your policy. If you have a choice between two different deductibles that are very close in price, pick the one with the lower amount because it will save you money over time – assuming there isn’t a significant difference in the two amounts.
How Much Can You Afford To Pay?
Homeowners insurance is mandatory in most states so if you don’t pay it, you could potentially lose your home. It’s not unlike car insurance either – if you get into an accident and don’t have homeowners insurance, the other party can sue for damages. That includes any medical bills they incurred, repairs to their vehicle, replacement costs for damaged goods in the car, etc. If there isn’t enough money available to compensate them for all of this, then they can go after your assets.
What’s The Maximum Payout?
Some people choose homeowners insurance because it won’t cost them anything extra on top of what they’re already spending on mortgage payments each month. In these cases, the only concern is the deductible because it’s a flat amount that can’t be negotiated. When you have to pay it each time your home sustains damage from a covered accident, what matters most is how much money you can afford to lose.
You should compare and contrast homeowners insurance policies carefully. Each one is different and includes a unique set of terms and conditions. Ask yourself if you understand these terms before signing on the dotted line because it’s not your broker or agent’s problem if you don’t read the fine print before buying a homeowner’s insurance policy.
