How to Compare House Insurance

Having proper home insurance can make life easier.

When you are shopping for homeowners insurance, you need to look at more than the premium, because the lowest cost is not always the best deal. You should compare the kind and amount of coverage, looking both at what the policy covers and what it does not cover. Check the financial health and customer satisfaction of the insurance company. By doing a little comparison shopping, you can help find the best homeowners coverage for your situation.

Instructions

1. Look through the policies you are comparing, and underline the replacement cost policy. See whether a policy has a similar construction replacement cost policy or a common replacement cost policy. A similar cost policy will replace the structure of your home with similar materials; a common policy uses the cheapest material available.

2. See if the policies have sump pump coverage, in case your sump pump malfunctions.

3. Look for information about perils. Coverage for open perils means you are covered for everything that is not excluded specifically; coverage for named perils means you are covered only for those things that are named specifically.

4. Research each insurance provider. A.M. Best Co. provides widely respected ratings of the financial health of insurers; make sure that your insurer has a high Best rating. Most states have websites that contain information like complaints, ratings, fraud reports and insurance company examinations for state codes. Other companies, like J.D. Powers, also have information about pricing, claims, billing, features and customer satisfaction.

5. Look for perks. For example, some insurers offer a discount if you have your auto and homeowner coverage with them. Most policies also pay for temporary housing after a disaster and provide liability coverage in case someone is injured on your property. Some insurers offer reduced premiums if your house has security measures, such as alarm systems, deadbolts, etc.

6. Before making your final selection, speak to local home restoration companies. They are called in when a home burns or suffers other damage, so they work with insurers and can make recommendations.

Tips & Warnings

• You might find it easier to work with an agent, rather than over the phone. If you don't work with an agent, be sure you understand exactly what your policy does and does not cover.

• Review your home insurance policy every year, especially if you have renovated your home, to make sure the insured value is still appropriate.

• You might need to buy separate coverage, or put a rider on your homeowner coverage, if you have valuables such as art or jewelry.

• Check to see if you have coverage for termite damage. And determine whether you need to buy flood insurance.

References

• Choosing Homeowners Insurance