How to Compare Home Insurance Companies

In today's tumultuous economic times, homeowners must do their homework to make sure they are making the right decision when it comes to selecting a home insurance company. They have to compare companies to select the most stable company that offers the best coverage terms, conditions and premiums. Homeowners must compare quotes received from each insurance company. Here are a few factors homeowners should consider.

Instructions

1. Compare home insurance companies' financial stability. If the insurance company is unstable, there is a good chance that they may not be around when it comes time to pay a claim. The last thing an insured needs is an insolvent insurance company at the time of a loss. Rating services such as A.M. Best, Standard & Poor's and Moody's provide reports on the stability of financial institutions, such as banks and insurance companies.

2. Compare how insurance companies handle claims. Finding out whether or not claims are reported to a 24-hour automated claims service or customer service representative makes a big difference to insureds who need hand holding at the time of a loss. More experienced individuals may be perfectly happy with a 24-hour automated service.

3. Review the insurance company's ability to adequately provide the requested type of insurance. For example, a home insurance company can adequately provide insurance for most homes. However, it takes a specialty home insurance company to provide insurance for some types of dwellings, such as an historic home that is classified as a national landmark. A company that provides insurance coverage for a 3-bedroom condo may not be able to offer adequate coverage for an historic landmark.

4. Visit the insurance company website to compare how well each insurance company meets your needs. Some insurance companies allow policyholders to add or delete coverages. Other companies require modifications to be handled by customer service representatives. Each is a perfectly legal and professional way of doing business, but it's up to the policyholder to compare services to see which fits her needs best.

5. Check the insurance company's standing with the Department of Insurance. Do a little homework and visit the Department of Insurance in your state to see if there are outstanding complaints against the insurance company. Unfortunately, not all insurance companies adhere to the rules and regulations as set forth by the governing authorities. By visiting the Department of Insurance website, you can rule out insurance companies that violate state law.

References

• What to Look for in a Homeowners Insurance Company
• Departments of Insurance by State
• A.M. Best