Seeking counsel from an insurance agent is common when you’re buying a home or a car. But what about when you’re renovating your home, adding to your family or experiencing other changes that increase your exposure to financial risk?
Homeowners often purchase coverage and forget about it until a named storm comes barreling across the Atlantic, but reviewing your coverage with your agent periodically is the best way to ensure you have total protection of your assets. When you talk with your agent, below are questions you should ask to ensure you make informed decisions about your financial future.
1. How many insurance companies do you have access to shop from?
The more insurance companies an agent has access to, the more choice he/she can offer. Work with an agent who has numerous options to make sure he/she can find the best combination of coverage, quality of the company and price.
2. How do you navigate and decide which insurance company has the best policy for my situation?
A good agent does market research on your home and considers all available options. During the review, an agent should pay attention to the rating of the carrier (an indicator of reputation), claims experience and the best overall value.
3. Do I have an adequate dwelling coverage limit on my homeowners policy?
Your Coverage A, commonly called dwelling coverage, is the maximum amount your insurance company will pay you to replace your home. Is it enough to rebuild and replace your home? The cost to replace your home is not your home’s market value (or the amount you could receive if you sold your home).
4. If my home floods, will my policy cover the damage?
Most homeowners policies exclude flood damage. Many new options for flood insurance have entered the market in the past few years, so ask your agent to evaluate your options and advise accordingly.
5. Do I have a water damage exclusion or limitation on my policy?
Some insurance companies have been excluding water coverage or limiting it to $10,000 in coverage when the home is older than 30 years old. Check with your agent so you understand if you have this limitation and how it can be avoided.
6. Does my policy cover my wedding ring and other expensive jewelry?
Many policies have a maximum limit of $1,000 for jewelry coverage. You can add a blanket of $5,000 in coverage or schedule a more valuable item to make sure it is covered.
7. What is the deductible for each of my policies?
Pay close attention to your hurricane deductible as many homeowners are surprised to learn that it is 2 percent of your dwelling coverage. For example, if you have a $400,000 house, the standard deductible for a hurricane would be $8,000. Your agent can explore options to lower that out-of-pocket expense.
8. Does my policy cover animal liability?
Since dog bites account for more than a third of all homeowner liability claims, it is important that you know how your policy would respond. Some breeds are excluded from coverage but with most dogs you can purchase animal liability for $25 to $50 per year that will provide $25,000 in coverage.
9. Do I have a wind mitigation inspection on file?
A wind mitigation inspection can help you save money on your home if you have replaced your roof or if your home was built above the code at the time of construction. Most homes in the Beaches area qualify for these discounts, but a wind mitigation inspection is needed to secure a discount.
10. Do I need an umbrella policy?
An umbrella policy is an extra layer of protection you can purchase that provides liability coverage in the event you exhaust your other policy limits. If you have assets to lose, it’s a good idea to get an umbrella policy, which costs a few hundred dollars a year for a $1 million in additional protection.
If you have questions, you should lean on professionals who have the heart of a teacher, choice and industry knowledge to help you simplify your choices.
Billy Wagner owns Brightway Insurance Agencies in Ponte Vedra Beach and Deland. He is the author of “Insuring Your Peace of Mind.”
