Home Insurance Guide: How to Choose
When it comes to choosing the right home insurance policy, there are many factors to consider. As consumers, we tend to look for the cheapest offer. But while going for the least expensive one may lead you to believe that you scored a bargain, it does not necessarily mean that you got a good deal.
The thing with home insurance – or any other insurance policy for that matter – is that it can be too much for a newbie or a first-time homeowner to take in. More often than not, when people get upset with their insurance providers, the problem is not in the company itself, but in the lack of understanding of the policy they signed up for.
As mentioned, several factors go into picking the best homeowners insurance policy. And just so you know snagging the best deal requires some work. In case you're a little lost about how and where to begin, these tips should lead you to the right one.
Get To Know Your Insurance Provider
Everyone wants to end up with an insurance policy that gives them the best value for their money. That said, you have to remember that your insurance coverage is only as good as the clauses in your contract. You need to understand the basics first and know what to look for to find the delicate balance between price and value.
One of the first things you need to consider before purchasing insurance is the reputation of the insurer. The convenient route is by looking them up online and checking on what their customers say about them. If you don't have any specific insurance companies in mind, try soliciting opinions from family and friends who have already purchased a policy.
Another thing to look at is their customer service model. How long did it take them to get back to you? Were they able to give satisfactory answers to your inquiries? Are their service staff easy to talk to?
If you have had problems getting answers prior to your purchase, take that as a red flag. Chances are, you may encounter greater difficulties in getting a response after buying a home insurance policy from them.
Last and most importantly, check on how fast and efficient their claims process is. You may want to consider checking out claims reviews on online forums and social media channels. These platforms are better sources than the company’s website because it’s where people usually share their honest opinions.
Take Your Budget Into Account
Buying a house is a huge commitment. The deposit itself is enough to put a strain on your family’s budget. And mind you, home insurance is just one of the many miscellaneous costs you have to think about.
The last thing you want is to over or under insure your property. You have to make sure that your home insurance policy can save you from incurring substantial costs in case something wrong or unexpected happens in the future.
Determining how much you need to insure your home for is not as tough as it seems. You can start by asking your contractor for an estimate of the possible building costs of your home. After that, do an inventory of other possessions you want covered and for how long. The rate of your premium will be based mostly on the tenure and coverage you choose.
If your budget is somewhat limited, go for a shorter policy term. However, insurers sometimes offer discounts and incentives for long term policies, so you might want to take that into account as well.
Understand Your Needs and Lifestyle
Home Insurance companies nowadays have a better grasp of what their clients need. Most of them have come up with points of differentiation that allow you to add more options to your policy basics and tailor it to your needs.
If you have plenty of valuable belongings like artworks, antiques, and jewelry; or if you live in a flood-prone area, it’s wise to purchase additional and ample coverage for those perils.
Do you have small kids, children in college, or pets at home? Do you travel often? These things don't usually come to mind when buying home insurance, but you may want to look into policies with special features or higher limits for temporarily-removed and off-premises contents.
Ask The Right Questions
The easiest way to figure out if you’re looking at the right insurance policy or not is by asking the proper questions. Even if you’ve read dozens of articles online or asked a lot of peers for recommendations, there are still details and information that only the experts can provide.
Some of these essential questions are:
- Are lost or misplaced items covered?
- What happens if the home is underinsured?
- How does the policy cover water damage?
- How does your company handle claims or valuable items such as antiques and expensive artworks?
A better understanding of the policy and its limitations will help you decide if you need to add more coverage or riders to your homeowners insurance.
Buy Insurance Like A Pro
The best home insurance is the one that gives you the most advantage during a claim. Before making the final decision, look at the various aspects of the insurance, particularly the special limits, value-added features, and the companies claim handling philosophy.
While there's no such thing as a perfect homeowners insurance policy, knowing your home and your needs will help you get the best protection available.
About The Author
Rachel Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.