Protecting Your Beloved Possessions

Looking Over Your Insurance Quote Before You Sign: Details Not To Miss

When provided with an insurance quote, very few people read the fine print. They generally assume that everything they wanted and needed in the policy is present, so they sign it and pay the first payment or the first annual payment. However, you should read the quote over before you sign it. There are many details you do not want to miss or misunderstand, and for which you should request clarification if you are unsure of what the policy says.

Details, Details

Details are important in any business contract. That is what your insurance is--a business contract. You are requesting an insurance company provide coverage, compensation and/or replacement of the item insured for the duration of at least one year. The details of the contract could make or break you if you are not paying attention. For example, if you are trying to get a quote on homeowner's insurance, what does it not cover? Does it cover flooding in the basement? What about old trees falling on the roof or damage from hail and windstorms? These are all details you should look for in the quote before you sign.

Why So Cheap?

When you finally find an insurance quote that gives you really cheap insurance, you may want to know why. Is it cheap because your deductible is set really high, or is it cheap because the policy only covers the bare minimum? For example, you get a quote for really cheap car insurance. If you look closer, you may find that it is only liability, the least expected amount of insurance required by law for you to carry. Your deductible may be set at $1,000 or higher, too. When compared to other, more expensive quotes, how does this stack up? If you can get equal coverage for nearly equal price from another insurance provider, your cheap quote does not look so cheap.

Replacement vs. Repair

Another thing you should look for in the quote is replacement versus repair. Does the insurance completely replace the damaged item, or does it only pay to repair the item? Most consumers would prefer to have an item completely replaced when the item is badly damaged, but not all insurance companies do a complete replacement, especially if they can repair the item for less.

There is also the issue of out-of-pocket compensation versus the insurance company's direct involvement with the costs. Does the insurance company handle all of the financial affairs around a claim for you, or do you have to repair or replace the damaged and insured item and then file a claim for compensation? Looking closer at the quotes you receive to see how a claim procedure plays out is important.