October 3rd, 2014
Home insurance is as unique as the property it protects. You’ll be surprised what you learn when you comparison shop. It’s the best way to find a policy you can afford that gives you the most protection for your money.
Start shopping for homeowner’s insurance as soon as you sign the purchase contract so you’re not stuck if the insurance carrier you choose refuses to insure your home. Some insurance carriers, for example, won’t insure homes that are built on slopes or have shake roofs or antiquated electrical systems
Insurance companies are regulated by the state. Step one should be to visit California’s Department of Insurance website to learn the typical cost of home insurance in different areas of your state. The site should also provide a rating for each home insurance company licensed to conduct business in your state, as well as any consumer complaints lodged against the insurance company.
Investigate home insurance companies you’re considering via ratings on such websites as those of the National Association of Insurance Commissioners, J.D. Power, A.M. Best and Weiss Research. These sites track consumer complaints against the companies as well as general customer feedback, the processing of claims and other data. In some instances, these websites also rate a home insurance company’s financial health to determine whether the company is able to pay out policies in the event you need to file a claim. An A rating or higher from Standard & Poor’s or an AA ranking or better from Moody’s Investor Service is a good indicator of strength.
You can also research through sites like Consumer Reports.
Who do you already do business with? If you’re happy with your auto insurance, find out if they do homeowner’s.
They may have worksheets to help you figure out how much insurance you will need since every home is unique. To ensure you find the right coverage for your property, list characteristics and specifics such as jewelry, art and anything unique that you want covered. You’ll also want to note whether the property is a vacation or second home, if it’s located in an area prone to natural disasters, if you have a pool or separate structures such as sheds that you want covered, how many chimney’s, any additional brickwork, and the type of foundation.
Then, you will want to figure how much you want for a deductible.
Finally, you’ll need to ask yourself if you want your insurance to be replacement cost or cash value. You’ll want to talk to the insurance agent about the benefits of both.
Request quotes from at least four carriers. Companies like State Farm and USAA that deal directly with consumers without using independent agents are called “direct writers.” In theory, they can pass on their savings by eliminating the middleman. So it’s useful to get multiple quotes from a variety of companies to identify things you may not have known were possible with homeowner’s insurance.
Don’t look solely at price. “No two insurers use the same policy forms and endorsements, and policy wording can be very different,” says Noah J. Bank, a licensed insurance broker with The B & G Group in Plainview, N.Y. “Even when you think you’re comparing apples to apples, there’s usually more to it, so you need to compare at coverages and limits.”
Be sure you understand what each policy you’re considering truly covers as well as what limits or exclusions are attached to it.
Look beyond traditional “captive” insurance agents who work for just one home insurance company. Working with an independent agent or broker who works with multiple insurers lets you compare price, coverage, etc., at multiple companies to see which one works best for you.
Make sure you talk to a Real Person and they’re fine when you ask lots of questions.
Will they be there when you have a claim?
No discount in the world will make up for the annoyance and inconvenience of slow claim processing so make sure you know how well their customer service is.