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6 overlooked questions you must ask when shopping for home insurance

shopping for home insurance If you pledged to make 2015 a year of financial renewal, now is the perfect time to compare home insurance quotes.

"Shopping around for insurance can take some time, but the results can make an impact on your pocketbook," says Lori Conarton, spokeswoman for the Insurance Institute of Michigan.

A cheap policy is great, but only if it also provides the coverage and customer service you need.

Following are six overlooked questions you should ask when shopping for home insurance. Uncovering the answers can help you zero in on the policy that serves you best.

Question 1: What discounts do you offer?

Most insurers offer discounts, but these vary widely by company. Some companies will offer 5 to 15 percent off for bundling coverage, according the Insurance Information Institute (III).

Others will cut your costs by 5 percent for installing a burglar alarm or dead-bolt lock, or a 10 percent break to homeowners who are 55 or older.

Some discounts may not be obvious. For example, many insurers charge lower annual premiums to people who maintain a good credit score, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association.

Other price breaks require you to be proactive. If you’re updating an older home, let your agent know, Conarton says.

Question 2: How much off-site protection do I have for my possessions?

Homeowners insurance generally covers possessions that are stolen or damaged away from home, such as in your car or while traveling.

But many insurance companies limit damage to 10 percent of your overall coverage, says Loretta Worters, III vice president.

Fortunately, policyholders often can buy extra coverage through insurance endorsements or riders. This coverage typically is offered for a small fee and is added to your existing homeowners coverage.

However, "Off-premises policies may not be available in all areas, particularly areas with high crime rates," Worters says.

Question 3: How much do you provide in additional living costs?

If your home burns down or is otherwise inhabitable, you'll need a place to live. Many insurers reimburse temporary living costs in such situations, including hotel bills and restaurant costs.

A typical homeowners policy provides additional living expense coverage that amounts to 20 percent of the homeowners policy limit, Worters says.

In addition, most insurers keep a time limit on how long you can use the coverage, such as 12 months.

Some insurers also offer endorsements that boost the coverage level. And the coverage can come in handy if you rent out part of your house.

"Coverage also reimburses you for the rent that you would have collected from your tenant if your home hasn't been destroyed," Worters says.

Question 4: Do you restrict or refuse some types of coverage?

Dog bites accounted for more than one-third of all homeowners insurance liability claim dollars -- nearly $484 million -- paid out in 2013, Worters says.

As a result, some insurance companies take a dim view of policyholders who own dogs that are known to be aggressive, such as pit bulls and Rottweilers.

"Some companies will write the homeowners insurance but specifically exclude the dog in the policy," she says. "Others won't write homeowners insurance on a homeowner that has a certain breed."

Some insurers won't cover you for losses that occur when you use your home for peer-to-peer renting, such as Airbnb.

If you're shopping for home insurance quotes and have an unusual situation at home, make sure prospective insurers know about it -- and that they're willing to provide coverage.

Question 5: Will you fully cover my jewelry, fur and silverware?

Homeowners insurance protects most of your expensive possessions, but coverage may be capped at $1,000 to $2,000 per item, according to III.

In addition, if you have actual cash value coverage, it will only cover the cost of the item after depreciation.

By contrast, replacement coverage will reimburse you for the full cost of replacing the item at today's prices.

If you need more protection, you may be able to purchase an insurance endorsement or rider that provides additional coverage for specific items, such as valuable antiques or art, expensive jewelry, or costly computer equipment.

Ask any potential insurer how much is available in endorsement coverage, and how much additional protection may cost.

Walker also suggests having each valuable item appraised by an expert before insuring it.

"If you do file a claim, it takes the guesswork out of the replacement value and allows you to recoup your investment," she says.

Question 6: How much can I save if I raise my deductible?

Raising your deductible is a great way to save. For example, taking on a $1,000 deductible could cut your insurance premiums by 25 percent.

Walker says there's another benefit to boosting the deductible: "It will discourage you from making small claims, which could put you at risk for being nonrenewed for filing multiple claims over a short period of time," she says.

According an October 2014 study, making just one home insurance claim can kick up your rate by a nationwide average of nearly 20 percent.

When getting quotes, ask how much you can cut your premium by choosing a deductible of $500, $1,000 or more.

However, Walker says, "Before raising your deductible, consider the amount of out-of-pocket money you can afford to pay if you were to file a claim." 

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