When you're looking for homeowners insurance, it's important that you run through some key questions beforehand. In an article for Houselogic, the Insurance Information Institute (I.I.I.), an American agency, advises that you consider the following four questions:

1. What are the replacement or rebuilding costs for my home in the event of a total loss?

As the I.I.I. explains, "your home owners insurance policy should cover the cost of building a new home from scratch." Typically, most policies will "cover partial or total damages caused by fire, hurricane, hail, lightning" as well as "any other disaster listed in your policy." However, it is important to understand that you usually have to take out separate policies for flood and earthquake-related losses, both of which are normally "excluded in standard home owners insurance policies."

2. How much is your personal property worth in the event of a total loss?

In general, "your home owners insurance policy should cover the cost of replacing all personal property (furniture, appliances, clothing) should it be stolen or destroyed by fire, hurricane, or another insured disaster." The I.I.I. explains that the majority of providers will cover as much as 50 to 70 percent "of the amount of insurance you have on the structure of your dwelling. So if you have $100,000 worth of dwelling protection, most insurers would recommend $50,000 to $70,000 worth of personal property coverage," the I.I.I. explains.

You can determine the worth of your property by compiling a home inventory list. In a previous article, we offered tips for putting this list together. Once you have determined the worth of all of your possessions, you will know the  cost to replace your things. Make sure to keep receipts from major purchases, as these will be especially helpful when putting together your list. 

3. How much liability protection do I need?

As the I.I.I. explains, "Liability covers you against lawsuits for bodily injury or property damage that you, or your family members, cause to other people. It also pays for damage caused by your pets."

Keep in mind that your policy covers the costs of both defending yourself in court along with any court awards, which are allowed to go as high as the limit of your policy. The I.I.I. adds that "Liability limits generally start at about $100,000. Most insurance agents and company representatives recommend that you purchase at least $300,000 worth of liability protection. If you have significant assets and need more liability protection than is offered under the standard home owners policy limits, ask your agent about umbrella liability."

4. Do I qualify for any discounts?

If you have installed certain safety features in your home, for example, smoke detectors, burglar alarms​ or deadbolt locks, you might be able to qualify for discounts from your insurer. The I.I.I. adds that sprinkler systems and monitored alarms are additional ways to qualify for discounts on premiums. If you have reached retirement and are at least 55, you might also qualify for certain discounts. Finally, "f you have completely modernized your plumbing or electrical system recently, a few companies may provide a price break," says the I.I.I. Make sure to ask your insurer about the particular discounts for which you might be eligible.

For all of your home and auto insurance questions, contact Fundy Mutual. With our over 70 years serving the New Brunswick region, we understand the needs of our customers and are committed to providing you with the best protection and customer service.