How to Compare Homeowners Insurance Plans

A solid homeowner's insurance policy should give you all the coverage you need at a fair price.

Getting the right home insurance for your needs at the lowest price takes some time and attention. Many times the lowest quote is not necessarily the best value or the lowest price, but it's hard to know when you are getting a quote that's too good to be true or too good to pass up. There are some things to keep in mind when comparing homeowner's insurance plans that will help you get the best deal without becoming penny-wise but dollar-foolish.

Instructions

1. Assess what your needs are---liability against lawsuits, storm damage or fire coverage. For example, if you do not own a dog, you may not need as high of a coverage amount for liability as someone with a dog. If you have a lot of pine trees in your yard, you may wish a higher coverage amount to cover tree damage.

2. Call local insurance agents to get quotes. You may also be able to find a broker who works with several different companies and can do some price shopping for you. Be honest about the conditions in your home and what additional property may need coverage, like expensive collectibles, antiques or jewelry.

3. Make sure the insurance companies are all reputable and financially stable companies that have good ratings with Standard & Poor's. Check the Internet for complaints by typing in the name of the company and with groups like the Better Business Bureau to see how good they are about paying on their claims. Insurance does you no good if you can't get the money you need when something happens.

4. Ask for a complete quote, or declarations page, with all the coverage details. Make sure you see how the premium breaks down---liability, replacement value, deductible and whatever else appears on the itemized quote---and what coverage amounts you are getting for the premium cost.

5. Look over the numbers on the replacement value of your home--the current market value minus the value of your land. You may save a few dollars and get a lower quote by shortchanging yourself on the value of your home, but if you need to replace it, you will only get what you are insured for, regardless of the value of your home. The same goes with personal property.

6. Get quotes with different levels of deductibles. See how that affects your overall decision and comparison. You may wish to go with a more respected company or more coverage and a higher deductible to keep your rate the same as it would be with a less reputable company or less coverage and a lower deductible.

References

• MSN Money: 5-minute guide to home insurance
• Federal Citizen Information Center: 12 Ways to Lower Your Homeowners Insurance Costs
• NetQuote: Instructions on How to Compare Home Insurance