homeowners insurance has
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.
in your area. While the
largest insurers offer policies nationwide, that isn't the case for some
plans. You should
be able to customize coverage to fit your needs instead of being strong-armed
into a policy that offers options you don't need or want.
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.
before you go
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
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 overinsuring your property by including the value of
type of basic coverage do you need? If you aren't renting, you'll likely
be choosing between HO-2 and HO-3 policies, according to Insure.com's guide to home insurance basics.
HO-2 policies protect against 16 perils, including fire, theft and explosions.
More common these days, HO-3 policies are more customizable and cover
everything except situations that you and your insurer specifically exclude.
covered under HO-4 policies, which provide liability coverage and protect
against the same perils as HO-2 policies, but not the structure itself. HO-6
policies are for condo owners. They are similar to renters' policies, but also
include personal property and improvements to your unit. Finally, HO-8 policies
are geared toward the owners of older homes, especially when market value is a
fraction of the cost to rebuild.
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. 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 homeowners insurance premiums, including the location, age and size
of your home. Personal information, such as age and marital status, also factor
- 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, it will
be covered for its original cost. But if your policy pays actual cash value,
you get a check for what the stereo is worth now -- a fraction of what it cost
- 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.