The best homeowners insurance has

Easy-to-reach representatives. Some companies encourage you to use local agents, while others prefer to do business online or over the phone. In either case, you should be able to report a catastrophe and file a claim 24 hours a day, seven days a week.

Availability in your area. While the largest home insurers offer policies nationwide, that isn't the case for some smaller insurers.

Flexible plans. You should be able to customize coverage to fit your needs instead of being sold a homeowners insurance policy that offers options you don't need or want.

A wide range of discounts. Some insurers will knock a bit off your rate for a variety of factors. Common reasons include having a security system, a newly built home or multiple policies with the same company.

Solid financial ratings. Several independent ratings agencies regularly assess insurers' abilities to pay claims. They include Standard & Poor's, A.M. Best, and Weiss.

Know before you go

How much coverage do you need? Though it might be tempting to insure your home for market value, experts say that's not necessarily a wise move. According to editors at ConsumerReports.org, if a disaster leaves your home a total loss, the cost to replace it could be more than its market value in certain situations. To be safe, they advise seeking a professional estimate before settling on a coverage amount. On the flipside, experts caution against over-insuring your property by including the value of your land.

What type of basic coverage do you need? There are seven common types of homeowners insurance policies, as outlined in the Introduction to this report. No one policy is right for every home, situation or budget. Consider the options, and the costs, and talk to your agent or insurance company to make sure your policy is the right fit. Also discuss riders, such as guaranteed replacement cost, which will guarantee full replacement cost even if it exceeds your policy limit. Also, where appropriate, consider supplemental coverages for things not covered -- or are specifically excluded from your policy. Flooding is one example; it's not covered under any named-peril policy and is usually among the named exclusions in all-peril ones. Flood insurance can be purchased separately, however.

Is the company reputable? Insurance companies can be tricky to evaluate using individual consumer reviews -- horror stories are common no matter the company. For a more balanced picture, check out the results of large consumer surveys, including national rankings by J.D. Power and Associates, ConsumerReports.org and others. Of course, it's also worth asking for recommendations from friends, especially those with similar assets.

Buying tactics and strategies

  • Know what will affect your premiums. A lot of factors can affect your home insurance premiums, including the location, age and size of your home. Personal information, such as age and marital status, also factor in.
  • Inventory your belongings. Your insurer pays up to a certain percentage of your total policy to compensate for damaged or lost personal property. Inventory your belongings to decide whether it's enough. Take pictures and note approximate values. The Insurance Information Institute can guide you through the process.
  • Consider replacement cost versus actual cash value. If your policy pays replacement costs for belongings, you're better off. If your old stereo is stolen as it will be covered for what it costs to get a new one. But if your policy pays actual cash value, you get a check for what your old stereo is worth now, minus wear and depreciation -- and that's typically much lower.
  • Investigate add-ons. Floods, earthquakes and sewer backups generally require special policies. So do particularly valuable items you may own, such as fine jewelry.
  • Compare, compare, compare. Rate-comparison sites such as Insure.com, Insurance.com and Netquote.com can help you get several homeowners insurance quotes fast. Remember to contact other insurers who might not use such tools, though, to see whether they can beat the quotes you receive.
  • Take advantage of discounts. Be sure to ask how you can save. Investigate buying other types of policies from the same insurer, known as bundling -- it should help your bottom line. Adding simple safety features to your home, such as fire extinguishers and security systems, may also cut your rates.
  • Think about a higher deductible. If you can afford to pay more in the event of a catastrophe, you may be able to lower your premiums. But it's a risk worth taking only if you actually have substantial savings, experts say.

What to do after a disaster

The hours after a fire or other calamity can be a whirlwind of confusion and shock. But it's also an important time to ensure you are fully protected. Your responsibilities include informing the insurance company of your loss and protecting your property against further damage. In the case of a fire, for example, that might include boarding up any damaged windows or placing a tarp over a damaged roof to protect your home's interior from the elements. You will also want to take steps to dry out your home from the firefighters' water to prevent mold and mildew from taking root on damp surfaces, and to remove undamaged possessions to a safe location. This FEMA brochure has more information.

Your home insurance company -- especially if it's one of the better ones named as our Best Reviewed picks in this report -- can be an asset in steering you toward firms that can help you secure your home and personal property, finding you a place to live if your home is uninhabitable, and in assessing the amount of damage. However, it's important to remember that an insurance company has a vested interest in limiting its own exposure. The lowest-rated home insurance companies might fight especially hard to limit the amount of money they have to pay out. This article (which advocates for using a public adjuster) points out some of the issues and tactics that a homeowner might run up against in settling a claim.

Public adjusters work on the insured's behalf in negotiating a settlement with the insurance company in exchange for a piece of the settlement -- between 5 and 20 percent depending on the size of the claim. Though not every advocate agrees, many say hiring a public adjuster might be worth considering if your claim is large or complex. What everyone does agree on, however, is that if you do decide to turn to a public adjuster, it's important to make doubly sure he or she is both reputable and capable. Get and thoroughly check references and make sure the adjuster is licensed if your state requires it (not all do). You can also check out the web site of the National Association of Public Insurance Adjusters for a list of licensed public adjusters.

Elsewhere in this report:

Best Reviewed Homeowners Insurance: Whether you need a policy for a castle or a studio apartment, insurance coverage is a must. These are the best companies for homeowner, condo-owner and renter insurance.

Best Homeowners Insurance: Research shows that not all homeowners insurance companies are created equally. These are the insurance carriers that experts and customers say stand by you the best in times of need.

Best Renters Insurance: Renters need insurance, too. Whether you are renting a small apartment or a whole house, these are the best insurance companies to protect your stuff.

Our Sources: These are the sources we relied on to find the best bets in homeowners insurance. They include large surveys and expert and user reviews.

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