Test Your Homeowners Insurance Smarts

While I don’t always see eye-to-eye with Suze Orman on many issues, a recent post in her column over at Yahoo! Finance brings up some very important questions in regards to homeowners insurance. The quiz is as follows:

  1. If your home is destroyed due to a loss (fire, for example) covered by your policy, the payout you receive will be equal to:
    1. Whatever it takes to rebuild my home to the standard it was before the loss.
    2. 125 percent of the dwelling limit coverage stated on my policy.
    3. 100 percent of the dwelling limit coverage stated on my policy.
    4. The value of my home’s materials at the time of the loss.
    5. I have no clue.
  2. The coverage amount of my policy is adjusted annually for inflation.
    1. Yes.
    2. No.
    3. I have no clue.
  3. If my possessions are stolen or damaged in a covered loss, my payout will be equal to:
    1. The depreciated value of the possessions at the time of the loss.
    2. The cost to buy new replacements.
    3. I have no clue.
  4. If I can’t live in my home while it is being repaired or rebuilt, my policy will help me pay for another place to live for:
    1. A maximum of 12 months with no dollar limit.
    2. A maximum of 12 months with a dollar limit.
    3. An unlimited period of time with no dollar limit.
    4. I have no clue.
  5. If I’m ever sued and must pay a large judgment, I have enough personal liability coverage so that I won’t be forced to sell my home or other assets to settle the payment.
    1. Yes.
    2. No.
    3. I have no clue.

Check out the article for how your results turned out. To my surprise, even though we just purchased a new policy about a year ago, I was not 100% sure on a few of the questions myself. This is a great opportunity to pull out your policy and make sure you understand exactly what it covers and see if you need to make changes.

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Filed Under: Insurance

About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.

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