Things to look for in home owners insurance?

Question

What questions should I be asking the agent when looking for homeowners insurance?
How do I know how much insurance I need for things such as-
Dwellings, Personal Property, Personal Liability, Medical Payments, Hurricane Deductible (2% or 5%) etc...

It seems confusing...

Answer 1

First of ask if the Ins. Co. you are quoted with is A rated (very important because it gives you an indication of the financial standing of the Company). Secondly, make sure you have replacement cost coverage.
How much Insurance you need will depend on many factors:
1) Dwelling coverage is nearly always based on a formula used by most companies to calculate the replacement cost of your home. The sq ft., age and construction (brick/stucco/wood etc) pay a large part in this calculation. The figure they arrive at will not always be the amount you paid for your home. It can be higher. Remember that the amount you need to cover your home for will include the cost of debris removal (if you house burns down the site has to be cleared ready to re-build) and this can be more expensive than you realise. You also need to know if Building Ordnance or Law coverage is included-this pays for bringing your house up to current building codes in your area, this is important when you own an older home.
2) The amount of personal property coverage is nearly always 60% of the amount of dwelling coverage BUT this can be increased if it's not enough to cover your personal possessions, take inventory. Remember to include every sock, towel, sheet you own as well as the larger items like TV's, DVD's, Stereo's etc. Keep receipts, make a video if possible, do it room by room. You may be shocked by the amount of "stuff" you actually own. If you own any valuable jewelry, furs, antiques, these need to scheduled separately (for an additional cost) to ensure you will be able to replace them.
3) Personal liability is there to protect you in the event you are sued. In todays litigious climate buy as much liability as you can afford to prevent your bank account and home being taken from you in a law suit. I've seen all kinds of law suits filed-sexual harassment, a child injured playing on a trampoline, your dog bites a neighbor. You name it and you can be sued. Protect yourself! $300,000 or $500,000 if you can buy it -depends on what the Ins Co offers.
4) Medical payments are to pay for the "slip and fall" claims that can happen in your home, for instance the child playing on your trampoline slips and breaks an arm, you are responsible (even if you told the child to stay out of your yard) and may prefer to pay the medical bills rather than face a lawsuit. It pays for someone twisting their ankle walking up your driveway. I realise not everyone will expect you pay their bills but there is always that one person out there that will want you to take responsibility for their clumsiness. $3000 or $5000 are the usual amounts for this coverage.
5) Hurricane deductible choices depend very much on where you live. If you are in an area prone to tornados or hurricanes take the highest deductible you can afford to pay. That way you won't be turning in smaller claims year after year, which can and will cause your Insurance to be cancelled.
The bottom line is talk to your Agent about the choices available to you. All of the above affect the final price of your policy and you can reduce some of the coverages with the understanding that should you suffer a loss you may not receive enough money to replace everything. Call around because different Insurance Companies will charge different prices.