Home Insurance Coverage Quiz: How Much Do You Know?
Pretty confident you know what’s covered under your homeowners insurance policy? Take our coverage quiz to see whether that confidence is justified.
1) True or false: A standard home insurance policy will help pay the medical bills for someone who sustains an injury on your property?
- True, but only if that person does not take you to court
- True, but only if that person takes you to court
Answer: a. Your policy can help pay the medical bills of someone who doesn’t take you to court (through Medical Payments Coverage). If the injured party takes you to court, your policy’s Personal Liability coverage can help pay your legal costs and the final judgment, up to the limits of your policy.
2) Which of these events is covered by a standard home insurance policy?
- A flash flood sweeps through your town and surges into your basement, destroying the floor and dampening essential support beams.
- A frozen pipe bursts, sending water rushing into your basement.
- A regular leak in your pipe leads to mold and wood decay in your basement, and the drywall needs to be replaced.
Answer: b. Generally speaking, water damage that comes from above (rain coming in a broken window/pipes bursting) is covered under your policy, and water that comes from below (flooding from a lake or river, for example) isn’t. If you live in a flood-prone area, consider purchasing a separate flood insurance policy. Recurring water damage also is typically excluded from coverage.
3) True or false: Home insurance rates and home insurance premiums are the same thing?
False. Though these terms are frequently used interchangeably, they aren’t the same thing. State insurance commissioners set rates statewide. Premiums, however, vary according to individual situation, coverage type, and carrier. Rates help determine premiums, but they are only one factor that insurance companies use to figure out what to charge.
4) For a house with a purchase price of $280,000 and a replacement cost of $350,000, how much dwelling coverage should you purchase?
- $315,000 (average between real estate and replacement costs)
- $350,000 or more.
Answer: c. The dwelling limit for your home insurance should exceed or equal the replacement cost of your home so that you are able to fully replace it after a covered disaster.
5) What’s the best way to save on homeowners insurance?
- Bundle your car and home insurance policies with the same carrier
- Raise your deductible reasonably
- Shop around for better deals and discounts
- All of the above
Answer: d. All of the above are ways to save. One caveat: make sure you never set your deductible so high that you won’t be able to pay it in an emergency.
6) True or false: Your credit score can be used to help determine how much you’ll pay for home insurance?
- True, but only if your score is bad
Answer: True, unless you live in California, Massachusetts, or Hawaii. Bad credit can ruin a lot of things for you, including home insurance premiums. However, your good credit score also can affect how much you pay by potentially earning you lower premiums.
7) Which of these items on your property can drive up your premiums?
- Swimming pool
- Fire pit
- All of the above
Answer: d. All of the above items on your property belong to a category called attractive nuisances. They could attract and harm people on your property, especially children. For this reason, insurance carriers typically charge higher premiums or decline coverage for properties that include such items.
8) If your golf clubs are stolen from your car while you’re at lunch, are they covered?
- Yes, under your car insurance policy (but only up to policy limits)
- Yes, under your home insurance policy (but only up to policy limits)
Answer: c. Your house’s contents are covered by the Personal Property portion of your coverage, even when stored outside of the home. Carriers, however, typically enact strict limits for high value items (which could include golf clubs), so if you may want to consider purchasing extra coverage in the form of a floater or an endorsement to make sure you are fully compensated if they go missing.
9) True or false: Your home insurance policy covers the belongings that your child takes to college?
- True, but only if you buy an endorsement (extra coverage)
Answer: b. As long as your children are fulltime students and younger than 24, their belongings typically are covered by your policy if they live in dorms. If they live off campus, they might need to purchase their own renters insurance policies.
10) True or false: Your policy won’t help pay for damages to any structures on your property not attached to your house, such as toolsheds, fences, and detached garages?
Answer: False. A standard policy can help pay for damages from covered perils to all structures on the property, up to the policy limits.
So how’d you do? One final question: Do you know how often you should shop your insurance coverage? Most consumer experts recommend at least once a year.