One of the most important things you can have for your house is a good insurance policy. In fact, if you are buying a home and have a mortgage, your lender will require it.

Many people shop for home insurance the same way they shop for gas. They just look for the lowest price and buy it without a second thought. But you have to be careful. Not all home insurance policies are the same.

If you only look at the price, you might not have the right coverage when an emergency happens. To make sure you are comparing apples to apples, here are the top questions you should ask when shopping for home insurance.

1. Will this cover the cost to completely rebuild my home?

This is known as Reconstruction or Dwelling Coverage. You want to make sure the coverage limit is high enough to actually rebuild your house from the ground up if there is a total loss, like a major fire.

2. How will my claims be paid out?

Insurance policies use different “forms” to decide how they settle a claim. Some pay for Replacement Value, which pays to replace the damaged item with a new one. Others use Actual Cash Value. Actual Cash Value takes out money for depreciation, meaning you get paid less based on how old the item is. It is important to know which one you are paying for!

3. How is my roof covered?

There are generally two ways a roof is insured: Replacement Value or a Scheduled Roof plan. This almost always depends on the age of your roof. Once a roof gets older, many insurance companies will only pay the depreciated value if it gets damaged. Always ask how a roof claim will be handled.

4. What happens if I have water damage?

Water coverage usually kicks in when pipes freeze and burst, or when a valve under your sink or toilet breaks. However, it is important to remember that flood damage is never covered under a standard home insurance policy. You have to buy a separate flood policy for that.

5. Are there optional coverages I should consider?

Every home is different. Ask your agent what extra coverages are available. They will cost a little extra on your premium, but they can be lifesavers when you need them.

6. Am I covered if I run a home-based business?

Many people have a side gig or run a small business from their living room. A standard policy might not cover your business equipment or liability. Be sure to tell your agent so you can get the right protection.

7. What about my jewelry and expensive items?

Most standard policies only offer a very small amount of coverage for things like jewelry, art, or expensive electronics. If you have high-value items, ask how you can add special coverage just for them.

8. How is my normal personal property covered?

Just like your home’s structure, you need to know if your personal belongings (like furniture and clothes) are covered at Replacement Value or Actual Cash Value.

9. How much is my deductible?

A deductible is the amount of money you have to pay out of your own pocket before the insurance company pays a claim. Usually, there are two types:

  • Wind and Hail: Covers damage to the outside of the home, like the roof.
  • All Other Perils (AOP): Covers other random claims, like a kitchen fire.

To keep monthly rates lower, many insurance companies have raised deductibles. You need to know this exact number so you can keep enough cash in your savings account just in case. Remember, if the damage costs less than your deductible, the insurance company will not pay out.

10. Who is selling me this policy?

This might be the most important question of all. Are you buying from an anonymous online marketer you will never speak to again?

It is frustrating to have a claim and think, “I thought they told me this was covered,” or have nobody to answer your questions. Make sure the person selling you the policy is a trusted, local professional you can rely on for years to come.

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