Comparison of Home Insurance
Buying homeowner's insurance can be an overwhelming task. It's best to know what you're looking for and to fully comprehend each different aspect of the policy before you make a decision. Shop around at several home insurance companies to see which one will offer you the best premium for your specific needs. Make sure you get an apples-for-apples quote when searching.
Other People Are Reading
-
Dwelling
-
The dwelling is the structure that you live in; this will be the most costly part of your insurance policy. The cost will depend upon how much the replacement value of your home is and what your home is constructed of. For example, a home with a wooden frame will be more expensive to insure than a block home due to the greater possibility of wind damage and susceptibility to fire. Think hard about how much you want to insure your home for: This figure should reflect how much it would cost to rebuild your entire home if something catastrophic happened. Some insurance companies will set this figure for you, so watch for amounts that are higher than you think is accurate.
Personal Property
-
This figure is often set automatically by the insurance company as a percentage of the coverage for your dwelling. For example, if your dwelling is insured at $100,000, your personal property may be covered up to $50,000. If you own expensive personal items, you'll need to request additional coverage to ensure that all of your valuables are covered. You can also opt to have no coverage if you feel you don't own anything of value and would like to reduce your premium amount. Note that personal property coverage includes situations like lightning strikes that short out your appliances, fires that destroy your belongings, and damage to your personal property caused by natural disasters.
-
Liability
-
Liability coverage will pay for any medical costs if someone should injure himself on your property. It also covers any damage to your property. This coverage is usually a set amount, but you can request additional coverage if you feel you need it. Some events are excluded, such as injuries caused by using a trampoline or a skateboard ramp.
Deductible
-
Your deductible can be tweaked according to your needs. If you feel you can afford a higher deductible, your premium amount will be a little lower. If you have a relatively low deductible, your premium will be higher. Some mortgage companies have certain limits as to what your deductible can be (e.g., not more than $1,000), so check with your bank before you commit to a homeowner's policy.
Flood Insurance
-
Flood insurance is not included in a standard insurance policy: It's either added on as a rider or as a separate policy, perhaps even through a different company. This type of insurance covers any damage to your home or belongings if a flood occurs. If you live in a flood zone, you may be required to have a flood policy in addition to your regular home insurance (see Resources).
Additional Premium Increases
-
Certain circumstances, such as if you own a dog (especially a breed of dog that's on the insurance company's blacklist), can bar you from getting a policy with an insurer. Or, you may be accepted as a policyholder, but your premium will rise due to owning a dog. Physical problems with the home (e.g., an older roof) can also have this effect on obtaining insurance.
Discounts
-
Some insurance companies offer a discount if you already hold other insurance policies with them---it's common for people to have homeowner's insurance and auto insurance with the same company. You can also get discounts for having a monitored fire and burglar alarm, smoke detectors and deadbolts. Ask what discounts you're entitled to (discounts vary among insurance companies).
-
References
Resources
- Photo Credit house image by Cora Reed from Fotolia.com
