Comparing home insurance policies requires patience and determination. In most cases, people will just look at the annual premium that their prospective insurers have quoted them. This can be a drastic mistake as coverage amounts are mainly dependent on the insurance policy’s components. A considerable reduction in just one coverage amount can lower the premium substantially. The problem will surface when a claim is rejected because of insufficient coverage under the policy.
The wise shopper compares all amounts on all policies using certain tools, such as a spreadsheet. For every insurance company, there should be a column, with each row having the same classification. When you make exact comparisons, it will be easier for you to see discrepancies explaining why the premium amounts differ. Adding notes next to every category will remind you why a certain insurance company was eliminated from consideration.
While comparing basic home insurance policies, expect their prices not to vary significantly. Home insurers give out discounts to encourage homeowners to keep their property low-risk – for example, by installing fire suppression devices or CCTV cameras.
Certainly, a wise home insurance shopper will use every single discount possible. Whatever money you have invested in the recommended risk mitigation measures can be recouped through much lower insurance premiums in the next few years. And if you stay with the same company, your loyalty will be rewarded through multi-policy discounts on your life and auto insurance policies.
The limits for liability insurance are raised as insurance companies are aware of litigation against the homeowner being a possibility. In the face of a major lawsuit, extra coverage can be made possible by an umbrella liability insurance policy, where the insured’s livelihood and property are protected from loss.
So what are you supposed to consider as you compare different home insurance companies?
First is reputation. Research your prospective insurers’ third-party ratings online. In the U.S., for instance, all insurance providers offering homeowner’s insurance policies are rated by AM Best Company. The ratings are determined according to the company’s performance in different areas, including claim handling. Low ratings indicate that the company has a substantial amount of customer complaints filed against it.
Also look into an insurer’s customer service model. Central customer service gives basic support to customers, and this acceptable to some policyholders. Local agents provide guidance over the entire term of the policy and provide recommendations to adjust coverage when necessary.
Lastly, timely response to a claim is of course critical to any homeowner. Experienced claims adjusters provide accurate estimates to cover important repairs to the property.