Friday, 26 August 2011

Questions to Ask When Buying Home Insurance

With all the clauses and conditions involved in home insurance policies, it is often difficult to know what your policy actually covers you for! Talking with your insurance broker and asking the right questions is incredibly important when buying home insurance. To help you with the process, the Insurance Experts at Sharp have compiled a list of a few important questions to ask.

What is the building value of your home and is there guaranteed replacement cost coverage? 
Your home's building value is the amount of money your insurance company estimates it will cost to rebuild your home in the unlikely event it is destroyed. There are different ways of calculating this estimate, and your building value will vary from provider to provider. As well, as time goes on, buildings costs will change, and it is important to know how your company will adjust the building value for inflation and increased construction costs. Knowing your building value will give you an idea of what your premiums are actually paying for!

Guaranteed replacement cost coverage is a kind of coverage that guarantees your house will be rebuilt to the standard it was originally built. That means that regardless of the building value associated with your home, your insurance company will replace your house in the event it is destroyed.

Is flood and sewage-backup coverage included? 
As one of the most claimed perils, flood coverage can be essential for homeowners living in flood-prone areas. It is not always offered in home insurance policies, and therefore it is important to ask your insurance broker whether or not it is included. Sewage-backup is also a common problem, and is not always included in home insurance policies. Be sure you know whether these two important perils are covered.

How much will you be covered for smaller losses? 
Most home insurance policies cover you in the event of a loss to smaller items like jewelry, bicycles or tools. They will typically set a limit on the amount that can be claimed. Knowing how much you're covered for will give you an idea of what you can claim in the event that something is stolen or otherwise destroyed.