The Importance Of Understanding Homeowners Insurance

So I’ll be honest – I’m usually of the “do as I say, not as I do” mentality, however, yesterday I took my own advice. My husband and I are in the midst of combining our insurance policies after our wedding, and I realized I’ve never really had all of my policies explained to me in depth. This is on the heels of a recent flat tire/towing experience where we learned exactly what our policies had in place for emergencies like that…you don’t want to learn what kind of insurance you have when you need it, so while you’re buying a home, or if you currently own one, make sure you understand exactly what you’re paying for.

Our insurance agent is with State Farm in McLean (we met with Nanci at Sharon Godfrey’s office – who I HIGHLY recommend). Being the Type A that I am, I went in with a list of questions for her on various policies. What I got in return was a much better understanding and education of insurance policies. Here are my takeaways from yesterday:

1. Combining your policies within 1 company, whether it’s State Farm, All State, Nationwide, etc. will give you a better price no matter what. Think car, home, etc.

2. Find out what the personal property amount is? If your home burned down (knock on wood), how much does your “stuff” cost to replace, meaning everything that’s not attached permanently to the wall. Furniture, clothes, electronics, jewelry, etc.

3. How much would it cost you to rebuild the interior/exterior of the property? Bathrooms, kitchens, floors, appliances, etc.

4. If you have guests over and their stuff gets destroyed or they get hurt – what kind of coverage do you have for that? Don’t assume the other person will have medical or personal insurance, in this economy there’s a lot people are cutting to save money and you just never know. Always protect yourself first.

5. Speaking of guests – what if one of them sues you? What’s your coverage for that?

It’s very important you understand all of the values and what they mean! Don’t be afraid to ask questions, these people know exactly what they’re talking about but sometimes they need to break it down in ways that are easily understood by us non-industry folks.

If you’re buying a home or condo, you’ll be required to show proof of an insurance policy to your lender before you close.