When choosing a home insurance company, it is essential to consider many factors, not just the monetary cost. By evaluating your coverage needs and doing thorough research, you can narrow down your search to the best insurance providers and home coverage options. 

According to NerdWallet, homeowners in the U.S. pay an average of $2,110 annually for $300,000 worth of home insurance coverage. Although this cost can vary based on the size of your home, location, and other factors, it is important to understand that home insurance can cost thousands of dollars every year. 

If you feel overwhelmed at the thought of policy shopping, this guide can help you determine your insurance needs and evaluate home insurance companies to make the best choice. Let’s dive in. 

Understanding Your Coverage Needs

Before you start to look at insurance companies and ask for quotes, you need to evaluate your insurance needs. Consider your property and whether there are any unique aspects of your home that may need special coverage.

Each homeowner’s insurance policy has six basic parts:

• Dwelling Coverage: Covers the physical structure of the home
• Other Structure Coverage: Detached buildings and structures, such as fencing
• Personal Property Coverage: Your belongings inside the home, like furniture and personal items
• Loss of Use Coverage: Covers expenses associated with temporary relocation if you cannot stay in your home during a covered event
• Personal Liability Coverage: Protects you or anyone else in your house from being held liable for injury or property damage to another person 
• Medical Payments Coverage: Helps pay for the medical expenses of people suffering injuries on your property, regardless of who is at fault 

Research Home Insurance Companies 

One of the best homeowner insurance tips is to do your research beforehand. Do not go with the first policy you find that seems attractive. It is important to thoroughly vet any potential insurance providers and ensure that their coverage options can meet your needs. 

Claim Handling

A company must be readily available in the event of an emergency or the need to file an insurance claim. While it may seem more attractive to go with a local insurance company, sometimes these businesses do not offer 24-hour service due to limited staffing. 

Ask about the average turnaround time for different types of claims. This will give you a good idea of how the insurance provider functions and what you can expect when you need to file a claim and quickly receive reimbursement. 

Customer Service

Superior customer service is vital for a good insurance company. Many customers only contact insurers when a disaster has struck, meaning the staff members handling claims and questions must be empathetic and collected. 

Receive Multiple Quotes

Write down any quote you receive and what the policy covers for comparison purposes. Use companies like InsuranceHub to easily compare rates and similar policies. 

Compare Cost to Coverage Quality

It is important to examine every element of an insurance policy regarding the cost. Cheaper insurance policies may seem more attractive, but they often have limited coverage or high deductibles, which may not be ideal for your insurance needs. 

Review Technology and Accessibility

An insurance company must be accessible to all types of customers. Look for companies that offer multiple methods of communication for processes such as filing claims. Any apps available need to work smoothly and should be easy to use, even for customers who may not be tech-savvy.

Read Online Reviews

Online reviews are a wonderful tool when seeking detailed information about insurance companies. Customers offer firsthand experience of interactions with the insurance agents and how their claims were handled. You can also review negative feedback and decide if it is a dealbreaker. 

Many review sites bar companies from taking down negative reviews, so potential customers can receive an accurate picture of how the business operates. 

Ask for Referrals

Homeowners insurance is one of the most important policies you purchase. It is essential to find a company that you trust. Therefore, it is always a good idea to ask family and friends if they have any personal referrals for insurance providers. 

Frequently Asked Questions

What is the 80% rule in home insurance? 

The “80% rule” dictates that your home insurance policy must have sufficient coverage to pay for at least 80% of the home’s total replacement cost. This is important because if you do not have enough coverage, you could be subject to penalties for being underinsured. 

Additionally, you may be subjected to additional out-of-pocket costs if your policy is less than 80% coverage. Your insurance company may decide to only pay for a proportion of replacement costs, so you will need more money to cover the remaining liability. 

Is it worth shopping around for home insurance? 

Yes. It is important to shop around while looking for home insurance to compare plans and decide which company or policy is the best fit for your needs. Going with the cheapest option may seem attractive, but it might cause problems later on. A more expensive provider may not offer the level of service to justify the higher cost. 

Can you negotiate home insurance rates?

No, but you can try to lower your overall cost by shopping and comparing plans. When you receive quotes from multiple insurance companies, it is important to include all potential benefits and drawbacks in the final cost consideration, even if they do not have a direct monetary value. 

Is it better to have a high or low deductible for home insurance?

Deciding the type of deductible for your plan depends on your financial goals. If you feel relatively confident in your ability to cover unforeseen costs, a high deductible plan with lower monthly premiums may be the best solution. For customers who seek more coverage and a lower deductible, the tradeoff is higher monthly premiums for your home insurance policy. 

Choosing a Home Insurance Company Made Simple

Whether you are a first-time homeowner or you simply need a new policy, choosing a home insurance company can be a daunting task. With this guide, you can feel confident and make an informed decision that best suits your financial situation and policy needs.. 

Would you like to learn more about how best to care for your home and property? Take a look around our site for more tips, tricks, and guides.