Since a home is the largest asset most people will ever own, it’s important that it’s adequately protected by a home insurance policy. But with so many home insurance providers out there, how can you figure out which one to work with? Here are the basic factors you should use to compare them and decide:
- Quality of Coverage and Price
When comparing various homeowner insurance rates, it’s easy to just skip to the end and look at the annual premiums. Don’t do this. You need to compare the quality of the coverage you’re getting: the types of damage that are covered, the amounts, the deductibles, etc. A smart way to do this is by entering all your quotes into a spreadsheet so that you can line up each factor and easily see which policies offer the best value, not just the best price. Give deductibles extra scrutiny; a high deductible will lower your annual rate, but may ultimately mean that you pay thousands of dollars in expenses before your insurance ever kicks in. Also look to see if specific disaster coverage is included (for fires, hurricanes, tornadoes, flooding, etc.) or if you’ll need separate policies for those.
- Company Reputation
Many home insurance providers have been around for a long time, so you can look at the company history and decide if it’s the type of institution you’d like to work with. Look at ratings and numbers of customer complaints.
- Customer Service and Claims Processing
If you need to ask a question or put in a claim, who do you want to contact and how? Some home insurance providers have a central location — which means you’ll be calling a big center — while others have local agents with whom you can develop a personal relationship. Still others offer online contact methods. Choosing which is best for you is largely a matter of personal taste, though you should pay special attention when you’re doing your research to how claims get processed.
If you’re considering a policy that doesn’t actually cover the value of your home, remember that you’re risking a complete loss of that investment. It’s good to be a savvy shopper, but the cost of homeowners insurance should be viewed as a necessary cost of owning a house.
Do you agree with these tips? Share your reaction in the comments.
Great references here: www.johnsoninsurance.org