How to Compare Homeowner Insurance Policies

When it comes time to compare homeowner insurance policies, don’t let price be the only determining factor. While price is important, there are a few other things to consider. Here are a few things to keep in mind when you compare homeowner insurance policies.

Difficulty: Moderate

Instructions

1. 

   Check out the financial stability of the insurance company. In today’s economy, you want to make sure that your insurance company will be around to write the check at the time of the loss. Ask your insurance company for their AM Best rating. AM Best is a company that tracks the financial stability of insurance companies and other financial institutions.

2. Compare policy terms, conditions, limits, deductibles and valuation. This is the meat of the homeowner’s insurance policy. Determine if the policy is written on a named peril or all risk basis (all risk provides more coverage). Compare the co-insurance requirement, whether or not the policy deductibles are the same and ask your insurance broker to explain the valuation clause.

3. Look at the day-to-day maintenance. Many insurance companies allow policyholders to make policy change request online while others allow phone or written requests only. Before approving a homeowner’s insurance quote, find out a little more about how the day-to-day policy maintenance is handled.

4. Understand the claims procedure. Similar to day-to-day maintenance, find out if claims can be reported online or over the phone only. Find out if the claims department has someone available 24 hours a day or a computerized recording.

5. Compare the premiums. After looking at all of the important homeowner policy issues above, look at the premiums to see if the services offered and coverages provided warrant the premiums being charged. It’s best to get at least three premium quotes to compare.