How to Evaluate Homeowner's Insurance
Reviewing homeowner's insurance policies is an important part of doing an annual financial check-up. The evaluation should review not only premium prices, but coverage. As time moves on, upgrades to your home, new purchases and collected heirlooms may need additional coverage. Since the insurance is designed to protect your family from financial loss in the event of a fire, flood or theft, look at all aspects of your homeowner's insurance to make sure nothing falls through the cracks.
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Instructions
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Check the solvency of the insurance company you are with before you do anything else. All the coverage in the world doesn't do much if the company is insolvent. Independent ratings companies such as Moody's and A.M. Best use proprietary formulas to determine the financial strength of insurance companies. Look for a company with any of the A-tier ratings.
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Look at customer satisfaction reports such as those offered by J.D. Power and Associates or "Consumer Reports." If you need to make a claim, it is good to know other customers had a positive experience dealing with the company.
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Review your coverage and confirm that it is still sufficient. If you have more valuables in the home, check to see if the overall coverage is reflective of the increase in your fair market value. If something happens and you need to rebuild or replace everything in your home, you want to make sure your existing policy provides adequate coverage.
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Ask your agent for an updated premium quote based on need values and coverage amounts. Be sure to ask for any discounts that apply to long-term relationships or holding auto or life coverage through the same company. You may also be eligible for home security discounts for having items such as alarms and fire extinguishers in your home.
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Shop the premium with other insurance companies that have similar financial and customer satisfaction ratings. Look for a policy that gives you the best coverage for the money spent.
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