Wednesday, May 9, 2018

How to Compare Home Insurance Quotes

How to Compare Home Insurance Quotes
The independent Insurance Information Institute strongly recommends you seek out the best deal on your home insurance. Its website says, “Prices vary from company to company, so it pays to shop around. Get at least three price quotes.”

It’s easy to get home insurance quotes and usually takes just a few minutes. But what should you look for in each? And how do you know which offers the best deal? In other words, how do you compare them?

Price Is Important. But It’s Not Everything

Buying insurance isn’t that different from buying anything else: the first thing you look at is the price tag. But there’s a good reason you don’t always buy the cheapest car, electronics, home, clothes or item on a restaurant menu.

With insurance, as with almost everything you buy, paying a bit more can mean your needs are better satisfied. And sometimes the cheapest ends up costing you more in the long run.

So by all means look first at the bottom line, but then check out what those different prices are buying you.

Coverage Is King

There’s no point in paying for insurance that doesn’t pay out when things go wrong. So make sure you know what risks are covered and which are excluded.

Also, check for caps on the dollar value of claims that can be made for particular risks or for particular types of personal and real property. For example, if you have an especially valuable piece of jewelry, art or antique furniture, you could stand to receive only a fraction of its worth under a standard policy if it’s lost, stolen or damaged. If that bothers you, ask how much it will cost you to insure the individual item(s) fully.

Get Your Coverage Right

Be sure you’re not paying too much to over-insure your home’s structure. You don’t usually need to insure the value of the land, because (unless you live on an eroding beach, cliff edge or somewhere similarly impermanent) that’s still going to be there after even the most catastrophic event. Ask one of the companies you’re getting a quote from to calculate how much it will cost to clear the site of debris and build a similar replacement home should the worst happen. They should have a good idea.

It’s equally important not to under-insure your home’s contents. As you acquire furniture, electronic equipment and other goods, you may need to increase your coverage, so it’s a good idea to build and maintain an inventory. Too much hard work? Check out the Insurance Information Institute’s “Know Your Stuff” app, which can make the process much easier.

Use this information when you’re comparing quotes. Different insurers may make different assumptions about the coverage you need, and may adjust your quote if you tell them you want more or less. And you can only compare apples with apples, so all the companies need to understand your needs.

Deductibles

Chances are your quote will offer a discount in exchange for a “deductible,” which is a sum of money you agree to contribute to any claim you make before the insurer makes its payment. So, suppose you have a small fire, and it costs $5,000 to repair the damage and replace destroyed items. If you have a $500 deductible, you have to find that sum, and the insurer should pay $4,500. As a rule, the higher the deductible you accept, the bigger the discount you’re offered.

Deductibles for home, auto and some other insurances are different from those on most health policies. Health deductibles are usually annual ones, but home ones apply to each and every claim. So be sure you can comfortably afford multiples ones in the same year.

When you’re comparing home insurance quotes, be sure they have the same deductibles. If they’re different, make an allowance in your calculations so you’re not comparing apples with oranges.

Bundling and Other Discounts

Many insurance companies will offer you a discount for “bundling,” which occurs when you have more than one policy with the same insurer. The most common form of bundling is getting your home and auto insurance from the same company. But, it can apply to most sorts of insurance and the more you bundle, the bigger the discount you’re likely to get.

There can be many other forms of discount too. You might, for example, be able to shave something off your premiums (payments) if your home has security devices, up-to-date electrical wiring and plumbing, or is better protected against damage because you have shatter-proof glass or storm shutters. And you personally may be eligible for discounts if you’re retired and over 55 years of age, or are a member of a qualifying group because your employer/union/church/club/whatever has negotiated special deals.

These discounts can add up, and often deliver genuinely valuable savings. It’s important to keep in mind that every carrier uses a different method to calculate your rate, and depending on the person, the best insurance plan for you could be very different from your friends and neighbors.

Comparing Home Insurance Quotes

To sum up, here are some key rules when comparing quotes:

- Look beyond the price to what you’re actually buying

- Make sure you’ll be adequately protected if you have to make a claim

- Don’t pay more than you have to, but don’t pay less than you need to

- Pick a deductible you can afford to pay if you make one or more claims

- Be certain you’re getting all the discounts to which you’re entitled

- But don’t be dazzled by them – keep your eye on the bottom line

- Compare the same fruit – if one quote’s cheaper because it offers less coverage or bigger deductibles ask yourself how those affect you

- Call the more expensive companies and say you’ve got a cheaper quote from a competitor – they may offer to beat it or to adjust their offers to suit you better

One other thing – You need to check that your insurer’s going to be viable and efficient. To be as sure as possible the company you choose is still going to be around when you come to make a claim, check out its financial strength. And call your favorite candidate company before you sign up to see how well it handles calls and queries. If it can’t help new potential customers efficiently, it’s unlikely to manage claims well. If you’re worried, check with your Better Business Bureau and your state’s insurance regulator to see whether they have large numbers of consumer complaints filed against it.