What Questions Should I Ask My Insurance Agent?
Ask how the dwelling amount was set, what the deductibles are, and whether the binder will reach your lender before closing.
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Before you say yes to a quote
Your lender needs two things. A binder showing coverage starts at closing, and a dwelling amount that meets the loan. Ask the agent how they arrived at that dwelling figure. It should reflect what it costs to rebuild the house, not what you're paying for it. Ask what the deductible is for wind or hail if your state sees those storms, since many policies set that one separately and higher than the standard deductible. Ask whether flood and earthquake are included. They usually aren't, and your lender may require one of them depending on the property. Ask when the binder goes to your lender and title company, and get a date. Your closing can't happen without it.
One quote isn't a check on the number
The only way to know if the dwelling amount and deductibles you were quoted are reasonable is to see what another policy would set them at. Compare before you sign the binder.
What else is worth asking before you sign
Ask what the replacement cost estimate includes. Most insurers arrive at the dwelling amount using a formula based on square footage, construction type, and local labor and material costs. It isn't an appraisal of the property and it isn't what you paid for the house. If there are upgrades like a renovated kitchen or finished basement, tell the agent. The dwelling figure may need adjusting to match what's actually there, because a number that's too low can leave you covering part of the rebuild yourself.
Ask how the deductibles work if there's more than one. States that see wind or hail often set that deductible separately from the standard one, and it's commonly a percentage of the dwelling amount rather than a flat dollar figure. Ask the agent to translate that percentage into an actual dollar number for your dwelling amount, so you know what you'd owe before coverage kicks in for that kind of damage. Ask too whether the standard deductible applies to everything else, like fire or theft.
Ask what's excluded outright, not just what costs more. A burst pipe is usually covered. Water that enters through a flood is not, no matter how it got in. Earthquake damage is typically excluded as well and sold as its own policy. Ask whether the property sits in a flood zone, since that can mean your lender requires flood coverage as a separate condition of the loan, apart from the homeowners policy itself.
Ask about claims tied to the house, not just your own claims history. Insurers pull a report on the property's past, and prior water or roof damage can affect the price or terms offered on this policy even though you weren't the owner then. If something shows up, ask what it means for your rate. Ask also what can raise the price after closing. A claim is the obvious trigger, but some insurers review pricing periodically regardless of claims, and knowing that now beats finding it on next year's renewal letter.
Questions about how the policy gets paid for
Ask how the premium is actually being paid. If your lender is collecting for insurance as part of your mortgage payment, that money sits in an escrow account, and the insurer gets paid from there once a year rather than from you directly. If escrow is not part of your loan, you are paying the insurer yourself, usually once a year at renewal, and missing that date can lapse the policy without much warning.
Ask what happens if the first year's premium and this year's bill do not match. Lenders often estimate escrow based on the quote they were given at closing, and if the actual premium comes in higher, the shortfall gets added to next year's payment or billed separately. Ask the agent to confirm the number that went to the lender is the number that will actually be charged, not a placeholder figure.
Ask whether the policy renews automatically and what notice arrives before it does. Most policies renew each year unless something changes, like a claim or a shift in how the insurer prices the area, and the renewal letter is where any increase or change in terms shows up first. Ask what could cause that letter to carry a non-renewal instead of a renewal, since that's a different letter with a different timeline, and the state sets how much notice the insurer has to give either way.
Ask what other coverage is bundled in or available alongside the dwelling policy, like liability if someone is hurt on the property or coverage for belongings inside the house. Ask how the agent arrived at those amounts too, since they are not always tied to the dwelling figure the same way the wind deductible might be. Getting clear on all of this before closing means the only surprises left are the ones that come with owning a house, not the ones that came with the paperwork.
Before you sign anything
Check that the dwelling amount on the binder matches what the agent told you, and confirm the date it reaches your lender. Compare it against another quote first.
