If you’ve never purchased a home before (or even if you have), you might be confused about how to choose the best possible homeowners insurance. Here are a few hints to help you get started.
First, research homeowners insurance companies. Be sure to find a reputable company. A good way to do this is to research their track records for claim satisfaction. Your local librarian can help you find this information. You’ll find out which local and national government or business-related agencies handle complaints, and this way you can avoid taking out homeowners insurance through a company that has had a lot of complaints filed against it.
After you narrow it down to three companies, you should get a quote from each of them for similar amounts of coverage. Insurance rates can vary widely even for similar coverage, so be sure to get the best deal that you can. One element to consider is whether you want to be covered for an amount that would replace your house (usually more than the purchase price) or whether you want to insure it just for the purchase price. If you insure it just for the purchase price, you pay less for homeowners insurance, but if your house burns down and you are only insured for the purchase price, you may not be able to buy an equivalent house, especially if housing values in your area have increased substantially.
You should also remember that if you bundle your auto insurance with your homeowners insurance, you can often save money by getting a discount on one or both types of insurance.
Another aspect to consider is how much your belongings are worth. It may not feel like much, but think about how much it would cost to replace all of your clothes, shoes, CDs, and electronics. Furthermore, if you run a business out of your home, you should ensure the value of any business related items such as materials, computers, records, etc. (and make sure you have offsite record backup for irreplaceable records in case something happens!)
If you have any items of special value (expensive jewelry, multiple computers, etc) you should alert your homeowners insurance company to the value of these items so that you will be sure that they are covered in case of theft.
Before purchasing a house, you should investigate whether or not it is on a flood plain. Homes in certain high-risk flood zones may require more expensive homeowners insurance, and it is important to research this before you commit to a purchase, especially since you yourself may have a harder time selling the house in the future.
Be aware that homeowners insurance companies may charge higher rates if you are a smoker or have a large aggressive breed of dog. Homeowners insurance companies may also let you know additional risk factors that will raise your insurance rates.
When shopping around for homeowners insurance, make up a list of questions and use it to guide your choices. That way, you can look at your notes later and you won’t be swayed into making impulsive decisions. Picking the right homeowners insurance can save you a lot of hassle in a time of crisis.