Homeowner's Policy: Are you sure you're insured?
About This Quiz
If you really think you know what you are doing when buying homeowners insurance (chances are you don't), then this quiz should be a breeze.
You should consider the price of your land before buying insurance.
The price of the land does not factor into how much insurance will cover. Only replacement costs for structures on the land, along with your possessions will influence the price.
The cost to rebuild your home should be based on the price you paid for it.
The cost of rebuilding could be more, or less, than the price you paid for it, or the price you can sell it for today.
The cost per square foot is usually a good indicator of how much insurance you need for your house.
To quickly figure out the amount of insurance you need, multiply the average cost per square foot in your community by the total square footage of your house.
The style of your house does not affect the cost of rebuilding your home.
Not only does the style of your house, such as a ranch or colonial, impact the cost of rebuilding, but the number of rooms will also figure into the mix.
Floods are covered by homeowners insurance.
Homeowners have to buy special flood insurance provided by the federal government for flood damage.
A burst water pipe is covered by homeowners insurance.
Typical policies will cover water damage from burst pipes or leaky faucets, but not surface water flooding.
When figuring out how much insurance you need, you should take into consideration your possessions.
Most policies pay for the repair or replacement of damaged property.
Actual cash value for your stolen or damaged possessions allows you to recoup the amount you expect to get if you sold the items, minus the depreciation.
Replacement cost coverage allows you to replace your insured personal property for what it would cost to buy them new.
Most companies provide personal property coverage up to 70 percent of the amount of insurance you have on the structure.
If your house is insured for $100,000, you should be insured for up to $70,000 worth of personal property coverage.
Trampolines do not affect the cost of property insurance.
Most companies won’t even insure a home with trampoline.
A major hurricane or tornado can push rebuilding costs more than the policy limits.
After a major disaster, contractors are in high demand, pushing the cost of rebuilding up.
If you have to rebuild your house to new building codes, your insurance will cover the added expense.
Most won’t pay for the extra expense, however, you can add on a special “endorsement” to your policy that covers a specified amount toward these costs.
The best way to figure out the value of your possessions is to conduct a home inventory.
Use photographs and videos to help you compile an adequate list.
An older home might cost you more money to insure.
Insurance companies differ, but some won’t pay to replace special features such as antique wall and ceiling moldings.
If you have a large older home, you might want to insure the structure for less money.
You should do this if you want to replace the large structure with a smaller one.
You shouldn’t get special coverage for antiques, jewelry or other valuables.
Most policies have limits on such things as jewelry. However, you can insure very expensive items with special coverage.
You have to buy special coverage if you cannot stay in your home after a disaster.
Most policies will pay your living expenses for so called “loss of use” after a disaster.
You should buy enough liability coverage to protect your assets.
You should buy extra coverage if you have investments and savings that are worth more than your policy’s liability limits.
You can save money by bundling your car and homeowners insurance.
The more coverage you have with one company, the less money you will pay.
A large deductible can save you money.
Insurance companies like it when you want to share more of the burden. The more money you pay, the more money you'll save.