What Kind of Home Insurance Should I Need?
Nothing beats the feeling of having your own house. The feeling of living in your own home is unmatched. The next thing you should do is protect what may very well be the biggest investment in your life. And a homeowners insurance policy is the best way to do it.
But where can you find the ideal homeowners insurance plan? And perhaps more importantly, how do you find a reputable insurance company? Let’s take a look together.
What to Consider in Home Insurance Coverage?
Not all home insurance policies are the same, which is why you should always consider the following factors before you sign up for a homeowners insurance policy.
Determine How Much Insurance You Would Need
The replacement cost of your home and its contents should be the basis of your insurance coverage amount. Arriving at the current amount is the trick to avoid underinsuring or overinsuring your homes. Underinsuring means you do not have enough coverage to replace your home and its contents in case of a total loss. Overinsuring means paying for more coverage than you need, which is a waste of money.
Make a list of all your expensive possessions and add up their values. For further help with this task, you can also use online resources or hire a qualified appraiser. Your number will represent the ideal value you want to insure.
Coverage of Outside or Inside of the Home
Some policies only cover the structure of the home, while others also cover the contents inside. For example, if a storm damages your roof and your furniture, a policy that covers both the outside and inside of the home would pay for the repairs and replacements. But if your policy only covers the inside of the home, you would have to pay for the damage on the outside out of your own pocket. So make sure you know what your policy covers and what it doesn’t.
Consider a scenario in which your policy’s $10,000 appliance cap is exceeded by the theft of $15k worth of appliances from your house. Given that your home insurance policy only allows for $10,000 in this situation, that is all you will receive.
Unfortunately, this happens quite frequently. Homeowners get a rude shock when they realize they won’t get the full amount for specific items from insurance companies. Some policies have limits on how much insurers will pay for certain personal items, such as jewelry, electronics, or artwork.
Personal Liability for Damage or Injuries
If someone sues you for losses or injuries sustained while on your property, or if you or a member of your family hurts someone else or their property, personal liability insurance will defend you. For example, if your dog bites your neighbor or your kid breaks their window, your policy would pay for the medical bills or the repair costs. If your policy doesn’t include personal liability coverage, you will have to bear these costs.
Hotel Coverage While the Home is Being Rebuilt or Repaired
This is another vital aspect to which several homeowners give the short end of the stick. When repairing or renovating your home in the future, you may have to live elsewhere. The duration can range from mere days to weeks. If your homeowners insurance policy doesn’t include hotel or rent coverage, this can be a major problem.
Even when some insurance policies include these expenses, there might be a limit to how much an insurer will actually pay. So you should check with your insurer to see how much hotel coverage they provide and whether it’s enough for your needs.
Losses and Expenses that Require Extra Coverage
Many insurance policies do not cover damage and losses caused by natural causes such as floods and lightning strikes. So you have to make sure that your homeowners insurance policy covers these losses.
This is the first thing you should check if you live in an area where floods, storms, earthquakes, and other natural calamities are all too common. See if there are any limits, what is excluded, how much the deductibles are, and what the co-payments are.
Compare Home Insurance Companies
The reputation of an insurance company and its goodwill in the market goes a long way in ensuring that you have really struck gold with your choice of homeowners insurance policy.
Research Expert Ratings
We always recommend that new homeowners shop around for their home insurance and compare different insurers. You can also check their ratings and reviews from experts to see how they handle claims and customer service.
You can even go down a sophisticated route and research the ratings of your shortlisted insurers with the BBB, National Association of Insurance Commissioners, and Weiss Research. These organizations can help you evaluate the financial strength, customer service, claims handling, and the overall reputation of different insurance companies. You want to choose a company that has a solid track record of paying claims and satisfying customers.
Talk to People
There is no substitute for real experience. You can ask your friends, family members, neighbors, or colleagues who own homes about their insurance providers and their satisfaction levels. You can also trawl through Reddit posts and check online reviews and ratings from other customers who have used the same insurers that you are considering. Talking to people can give you valuable insights and tips on how to choose and use home insurance effectively.
Get Multiple Quotes from Different Providers
Don’t settle for the first offer you get or the one that your bank or mortgage lender recommends. This will allow you to compare the prices, coverage levels, deductibles, discounts, and customer service of each company.
You might be surprised by how much you can save by shopping around and negotiating with different insurers. So do your own research and find the best deal for you.
Hire a Financial Advisor
The fine print in insurance policies is not always easy to make sense of. For this reason or any other, if you still find yourself at a crossroads and not sure where to go, you can always depend on financial advisors to show you the correct path.
A financial advisor will help you zero in on the right homeowners insurance policy. They will help you assess your risks, needs, and goals and recommend the best type of policy and coverage amount for your situation.
We Can Help You Find Reputable and Trustworthy Insurance Companies
We have a network of reliable and reputable home insurance providers that we work with regularly. Our partners are trustworthy and experienced professionals who have been providing quality coverage for homeowners like you for years.
Contact us to find an insurance company you can trust.