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How to Compare Homeowners Insurance Policies

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Owning a home is a large investment. Homeowners insurance protects that investment from different sorts of events that include: home damage, visitor accidents or injuries, storm damage, or other events which require repairs or payment to resolve.

But not all home insurance companies are created equal and you can find a wide range of coverage and cost options simply by shopping around.

How do you know what is the right homeowner’s insurance company to go with? Let’s take a look.

Decide on a Level of Coverage

Finding the right homeowner’s insurance policy begins with choosing the most suitable level of coverage. Most standard policies cover your home and other structures, but how much coverage you need depends on what it would cost to rebuild your home from the ground up.

You’ll start by determining how much is an affordable deductible (amount paid out of pocket for a policy to kick on a claim) level for you and your family, and if you need coverage for belongings of value (jewelry, etc). Do you live in an area with the risk of earthquakes or hurricanes? You may want to consider adding additional coverage outside of a standard plan for protection in the case of events such as this.

If you determine what sort of coverage level you need before you start shopping for a homeowners insurance policy, you will be better prepared to compare policies. Insurance companies that do not cover something you need can be eliminated outright, so the more information you have the better off you’ll be when you start comparing policies.

Comparing Homeowners Insurance Quotes

When you know what coverage you need, it’s time to start shopping for a policy. As a general rule, it’s smart to compare no less than three homeowners insurance policies (but you can get quotes from more). This way you’re sure that you’re getting the best deal for the same level of coverage.

The average monthly premium in the USA for a homeowners insurance policy is around $110 as of 2018. But rates can be dramatically different depending on the value of a home, the level of coverage, typical local home repair costs, risk of weather damage, and more. This is because no two houses are exactly the same. Even if we have two neighboring homes that are the same design on the same acreage, the contents inside and belongings can be very different.

You can get a quote online, through the phone, or with a dedicated insurance agent to make sure you’re getting the lowest home insurance prices possible. No matter what, make sure you’re comparing policies that have similar levels of coverage.

Also, keep in mind that quotes are just that, they are quotes. The end price may change a bit after a home inspection where the insurance company determines a higher level of protection is required.

Size & Stability of Insurance Company

You may be able to find some cheaper quotes from lesser-known smaller insurance companies, but this carries its own risks. You will want to go with an insurance company that has a strong financial standing, this way you can be sure they’ll have the money to pay your claim if need be. Smaller companies could go bankrupt if, for example, a hurricane requires them to pay claims on lots of homes at once. This would mean you’d be out of luck. Make sure the insurance company you’re going with is in good financial standing.

Check Homeowners Insurance Reviews by Real Customers

If we are looking at different homeowners insurance policies that have the same coverage, same deductible, and same monthly premium; what else can we compare? That answer is simple, what customers are actually saying about the insurance company.

  • how do they handle claims?
  • is the process straight forward or do they fight you to receive payment?
  • what are real customers saying about them?
  • can they make changes to the policy?
  • what is their property claims satisfaction?

Comparing what real customers are saying about different companies is a great way to determine who would be the best insurance company to go with. Looking at property claims satisfaction of different companies is something J.D. Power does every year based on real user feedback and you can find this with a simple Google search.

You can check Facebook groups, insurance forums, Reddit, and other social media platforms to see what real people are saying about any particular insurance company. If you see lots of reviews saying “the insurance company fought me every single inch of the way”, then maybe you should be considering a different homeowners insurance company.

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