Frequently Asked Questions

Do I need house insurance?
If you do not have the money to replace all the contents of your home and buy a new place to live, you need insurance. This type of insurance exists to make sure that you and your family will have the funds to replace or repair your home and its contents in case of an emergency. If you are wealthy enough to be able to do that out of pocket you won’t need house insurance. If you are working for a living or living on a fixed income, you need home insurance. Of course, this applies only if you own your residence. If not, you need renters insurance. Also, don't confuse house insurance with mortgage insurance; they are two different things. You may or may not need mortgage insurance (your lender will make that decision), but you definitely need insurance coverage for your house.

Is this type of insurance expensive?
No, house insurance is one of the most affordable kinds of insurance available. It is usually cheaper than car, health, life, and most other common insurance policies. You should be able insure the average home for a few hundred dollars a year. This makes insurance a bargain for the average person. A homeowner should be able to get all the protection he needs for less than $100 a month. A renter should be able to get adequate protection for less than $30 a month. Insurance is one of the best deals available for the average person today.

What is the difference between Total Replacement Coverage and Actual Cash Value?
Total replacement coverage will give you the money that you need to replace an item that was destroyed with a brand new one. If your five-year-old TV set was destroyed, Total Replacement Coverage would give you the money you need to buy a brand new TV set of the same size. Actual cash value will only reimburse you for the cash value of the item. That means you would probably get less than $100 for a five-year-old TV set. Total replacement coverage is a much better deal for the average person who needs to replace household possessions such as furniture or appliances. Actual cash value is only a good deal when you need to cover high value items, such as jewelry.

How do I determine how much coverage I need?
The best way to determine how much coverage you need is to figure out how much money you will need to replace your home and all of its contents. The dollar amount of coverage on the policy should probably be double the replacement amount. That way you should be able to replace everything and have some extra funds if your home is destroyed. You should also have around $50,000 of liability coverage to protect your home from lawsuits. The amount of liability coverage in the average insurance policy should be enough to protect the average family. Having slightly too much insurance is always better than not having enough insurance.

What is the minimum amount of insurance coverage?
The minimum amount of insurance is the amount needed to replace your home and its contents. That way you and your family will be able to survive on your own even if your home is destroyed. In most cases, it will be better to have the dollar amount of the insurance policy at twice that amount. That way you will have a lot of extra cash available in case your home is destroyed.

Does this insurance policy have to be with the same company as my other insurance policies?
No, there is no law or insurance industry requirement that all of your insurance policies have to be with the same company. You can have policies with as many different insurance companies as you like. Many people have all their insurance through one company or agent because it is easier for them. People that use multiple insurance companies often pay less because they are free to take advantage of the best deals.

What questions will my agent ask me when I call?
Standard questions that your agent may ask include:

  • Do you own or rent your home?
  • What is the value of your home?
  • What kind of coverage do you want?
  • What deductible do you want to pay?
  • Do you keep any valuables such as jewelry in your home?
  • Do you operate a business out of your home?
  • Do you live in a flood plain?
  • Do you have a fire alarm?
  • What sort of locks do you have on your doors?

What does the rating system mean and how can I find out how find out how my insurance company is rated- A, A+, A++?
Insurance ratings are set by a company called A.M. Best. This company examines insurance companies and determines their financial strength based on the companies’ ability to pay claims on their policies and the amount of money they have available. The companies with the most money to pay claims on their policies are given the highest rating, A++. The lower the rating the less likely your insurer will be able to pay a claim on a policy. You can learn your insurer’s rating by going to:

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