Guides
Questions to ask before you buy a homeowners policy
Questions that expose differences between policies: roof terms, wind deductibles, claims handling, renewal and cancellation, and the answers to worry about.
The most useful questions to put to an agent or insurer are the ones that make a quote's fine print visible: how the roof is paid for, what the wind or hail deductible works out to in dollars, what happens to your premium after a claim, and how much notice you get if the company cancels or declines to renew. Ask them before you pay, ask for the answers in writing, and treat a vague answer as an answer. The NAIC's Consumer's Guide to Home Insurance (2022 edition) lists several of these questions itself, and the rest below come from where claims typically go wrong.
Print this page or paste the questions into an email. Sending them in writing means the answers can be quoted back if they turn out to be wrong.
Questions about the seller and the company
- Are you and the insurance company licensed in my state, and for how long? The NAIC puts this first, and says your state insurance department can confirm both. Business cards are not proof; see how to check an agent's or adjuster's license.
- Which companies can you quote, and which will you not? An independent agent should name the carriers in the market, and an exclusive agent should say plainly that there is one. The difference is explained in captive agents, independent agents and direct insurers.
- Is this company admitted in my state, or is it a surplus lines carrier? The answer determines whether state guaranty funds stand behind the policy and how much rate and form review it went through (admitted vs surplus lines home insurers: what you give up).
- What is the company's financial strength rating, and from whom? AM Best, Demotech, KBRA or S&P (Financial strength ratings: AM Best, S&P, Moody's and Demotech). Your lender may have a minimum.
- How do you get paid? Commission on policies sold is the normal answer for agents. A straight answer is a good sign.
Questions about coverage
The answers to these change what a claim pays.
| Question | Why it matters | A worrying answer |
|---|---|---|
| How did you arrive at the dwelling limit, and does it update automatically each year? | An out-of-date limit is a common reason people are underinsured | "That is based on your purchase price" |
| Is the roof covered at replacement cost, actual cash value or a payment schedule? | A schedule or ACV roof can cut a roof payment sharply on an older roof (Roof payment schedules and ACV roof endorsements) | No answer until you ask for the endorsement |
| Is there a cosmetic damage exclusion for hail or wind? | Dented metal roofing and gutters may be uncovered | "I'd have to check" |
| Is personal property replacement cost or actual cash value? | Decides whether you are paid for the new price or the depreciated one | The quote does not say |
| What is the extended replacement cost or ordinance or law percentage? | Covers code upgrades and cost surges after a major loss (extended and guaranteed replacement cost coverage, ordinance or law coverage: paying to rebuild to code) | Not offered, and no explanation |
| Is water backup included, and at what limit? | A sewer backup is excluded from the base form (water backup and sewer backup coverage) | "It's covered under water damage" |
| What is excluded for water, mold and pipes of my house's age? | Older homes meet limits on plumbing and leak coverage | A limited-water endorsement hidden in the quote |
| What is the liability limit, and does it match my umbrella requirement? | Umbrella insurers set minimum underlying limits (umbrella insurance for homeowners: what it adds and where it stops) | Limits below what the umbrella needs |
| Do you cover dogs, a pool, a trampoline, a home business or occasional rentals? | Breeds and uses are excluded or limited more often than people expect | "We'll sort it out if there is a claim" |
The NAIC guide adds a few more that are worth asking: how much coverage you need for personal property, how much liability coverage to buy, whether to buy flood or earthquake coverage (your homeowners policy covers neither), and what kinds of water damage and mold are not covered.
Questions about deductibles and storms
- What is the all-other-perils deductible, and what is the wind or hail deductible? Get both in dollars. A 2% deductible on a $400,000 dwelling is $8,000.
- What triggers the hurricane or named-storm deductible? The trigger varies by state and insurer; see wind and hail deductibles explained.
- Does the deductible apply per occurrence or per year?
- Does the policy cover wind at all? Coastal policies sometimes exclude it and send you to a state wind pool (windstorm exclusions and wind-only policies).
Questions about price and what can change it
- Is this the final premium or an estimate? Ask what the insurer still has to verify: an inspection, a claims report, roof age, credit-based insurance score.
- Which discounts are in the number, and what proof do you need? Proof deadlines matter; a discount can vanish at the first renewal if no one sends the certificate.
- What fees, surcharges and installment charges apply? See installment fees, policy fees and surcharges on a homeowners policy.
- How many rate increases has the company taken in my state recently? An agent will not always know, but the answer tells you how candid the office is. Rate filings are public in many states.
Questions about claims
- How do I report a claim, and is the line staffed around the clock?
- Are claims adjusted by company staff, independent adjusters or both? (staff, independent and public adjusters)
- If I ask a coverage question after damage and do not file, does that get recorded as a claim? Practices differ. Ask before you call, because a recorded inquiry can follow you to the next insurer (CLUE reports: how claims history follows you and your house).
- If I submit a claim, how will it affect my premium when I renew? This is the NAIC's own question, and the honest answer is "it depends on the type, the number and the cause." Read will a claim raise your homeowners premium? first so you can judge the answer.
- What do I have to do after a loss, and by when? The policy sets deadlines for notice and a proof of loss; they are in the policy's conditions section.
Questions about renewal, nonrenewal and cancellation
The NAIC says most insurers don't offer a grace period for paying the premium, that new policies can typically be cancelled for any reason in the first 60 days, and that notice periods for cancellation and nonrenewal vary by state. Ask the specifics for your state.
- After the first 60 days, what are the only reasons you can cancel?
- How much notice will I get of a nonrenewal, and will you give me the reason? (nonrenewal vs cancellation of homeowners insurance: your rights)
- If I cancel mid-term, is the refund pro rata or short rate? Pro rata returns the unearned premium for the days remaining; a short-rate schedule keeps a penalty. See how to cancel homeowners insurance and get a refund.
- Is there a cancellation fee?
- How will you notify my mortgage company?
Extra questions if you are buying a house
- Can I see the home's claims history? The NAIC lists this among its suggested questions. Ask the seller for a recent claims report, and see check insurability before you buy a house.
- Will you insure this roof, wiring, panel and plumbing as they are? Ask for a written yes or no before you waive an inspection contingency.
- Can you give me a ballpark before I make an offer? The NAIC notes you can ask an agent to estimate the cost of insurance when you are thinking of buying a home.
How to use the answers
Write each answer next to the question and drop the key ones into the homeowners quote comparison worksheet. Any answer that exists only in conversation should be confirmed by email: "To confirm what you told me by phone, the roof is covered at replacement cost and the wind deductible is 1%, or $4,000." If the policy that arrives does not match, you have the evidence for a correction, or for cancelling and taking back the unearned premium. Check your state's rules on new-policy cancellation and refunds with home insurance rules by state.
Key takeaways
- Ask first about the roof, wind and hail deductible, water backup, ordinance or law and the dwelling limit, because those items most often turn a covered-seeming loss into a short payment.
- Convert percentage deductibles into dollars before comparing, and ask what triggers a hurricane or named-storm deductible.
- Ask what a claim, or a coverage inquiry, does to your premium and your claims record before you ever need to make one.
- Ask how much notice you get for cancellation and nonrenewal, and whether a mid-term refund is pro rata or short rate.
- Get every answer in writing, and compare it with the draft declarations page before you bind.