You’re in the process of comparing homeowners insurers, whether because you’re buying a new house or doing your annual insurance reevaluation.
So what do you need to know when comparing home insurers?
Below we give you everything you need to consider when shopping for insurance and comparing potential homeowners’ insurance companies.
When should I shop for homeowners insurance?
Before we get into the questions you should ask your potential homeowners insurance company, let’s look at the basics of comparison shopping: when and how should I shop for homeowners’ insurance?
If you’re buying a new house, you want to start shopping for homeowners insurance as soon as there’s an agreement on the table. You want to have a homeowners insurance policy in your hands by the time the contract is accepted and both parties have signed.
Once the contract is signed, the house belongs to you—which means risk also belongs to you.
You can shop for homeowners insurance prior to purchasing a home as well. In fact, it’s a good idea to compare potential homeowners’ quotes if you’re looking to purchase a house. This can show you how much your insurance would cost for that house, so you know how much you might be paying on top of your mortgage payments.
Pre-purchasing comparison shopping could also help you decide if you want to update or renovate the new house to pay less on the insurance. For example, you might want to install an alarm system or redo a flood-prone basement to reduce potential insurance costs.
If you’re remaining in the same house, you should consistently reevaluate your homeowners insurance. We recommend shopping around at every renewal date. If you have a yearly policy, you should start comparing quotes two to three months before your policy is set to renew.
This gives you time to find the perfect quote and make the switch (if you choose to go with a different company) before your policy automatically renews. It also helps you avoid lags in coverage, which puts your home at risk and raises premium costs.
How do I shop for homeowners insurance?
What does “shopping” for insurance mean? How can you compare quotes?
Most people will shop for insurance online or on the phone with an agent.
Too many people will make the mistake of using an affiliated agent, though. They’ll call up one of their potential insurers and look for a quote. The agent will then say, “I can help you compare quotes with our competitors as well.”
While this seems like a great service, they ultimately may want to sway you in the direction of purchasing from their company.
Moreover, consumers are finding that online comparing alone doesn’t answer all of their questions. You usually have to go through an extensive questionnaire, and you don’t get assistance answering the questions.
We recommend calling a local agent who can help you answer questions and take your situations into mind. They’ll also make sure you pay the best rate for the greatest coverage without swaying you in one direction. Hybrids between online and agent can also work well.
Contact InsuraMatch now for an unbiased approach to insurance comparison shopping!
What factors influence your premium cost?
Prior to insurance shopping, you want to get an idea of what your insurance company will look at when calculating the cost of your premium.
There are a number of variables that influence the cost of your insurance. Below are the nine most common factors, but there may be others you should consider as well. Talk to your agent to see how your situation will impact your cost.
- Coverage limits: This is the basis of your cost. This defines how much your insurance company would pay out in the case of a total replacement claim.
- Property address: Your neighborhood can impact your coverage. For example, a high theft area or a rural home without nearby emergency structures are considered “riskier,” resulting in a higher premium cost.
- House information: The basics of your house will also come into play. This includes the square footage, the age and condition of house, the add-ons, the number of stories, the plumbing and electrical systems, etc.
- Current conditions/amenities: In general, the newer the home and appliances, the less risk there is. This means you’ll likely have lower insurance for recently built or renovated homes.
- Additional structures: Any add-ons, detached structures, or amenities (like a pool) will also factor into the cost. For example, pools are considered a high-risk structure that might raise your premium.
- Contents: You want to ensure all of the “extras” in your house, especially big-ticket items, with full contents insurance. The more items you cover, the more it raises your premium.
- Safety features: You may have a lower premium if you have a number of safety features that reduce your risk of theft or liability. This can include deadbolt locks, fire extinguishers, sprinkler systems, fire/smoke alarms, burglar alarms, and even a fence around your pool. Discuss safety discounts with your insurance agent.
- Credit score: You can’t be denied coverage based on your credit score, but some companies may charge a higher cost to those with a low credit score.
- Deductible: If you choose a higher deductible, you’ll generally pay a lower premium. Learn more about this relationship here.
There may be other factors that make your home a challenge to insure as well. Learn more here.
However, there are ways to reduce your cost as well. For example, bundling your home and auto can help minimize your monthly cost.
How much coverage do I need?
The more coverage you have, the more you pay in premiums. But that doesn’t mean you want to skimp on your coverage to pay a lower cost. Doing so can leave you in a financial mess if and when you need to submit a claim.
So you want to ensure you have the right coverage at the right cost so you’re protected now and in the future.
Talk to an insurance agent about the following types of coverage:
- Liability insurance (highly recommended)
- Dwelling coverage (highly recommended)
- Contents coverage (highly recommended)
- Additional living expense coverage (recommended)
- Flood insurance (recommended)
- Personal umbrella insurance (highly recommended)
- Earthquake coverage (recommended based on location)
What questions should I ask my insurance company?
When shopping around, there are a few questions you should ask each company to ensure they’re the right fit for you. Think of insurance shopping like dating. You want to make sure they meet all the qualifications before you make a commitment.
We recommend first having an idea of the coverage you want and then comparing quotes based on that policy. This will help you truly compare apples to apples. If you compare different quotes for different policies, it can be hard to determine exactly what’s right for you.
For example, you want to ensure your pool is covered by your insurance. You’ll want to include this in all of your comparison shopping. One company includes pool in your general homeowners, but another company does not. This means you’ll need to compare the first company’s general policy with the second company’s general plus an umbrella policy for the pool. If you were to compare both general policies, you might not get a full understanding of your premium costs and total coverage.
Below are the 15 questions you should ask each insurance company when comparing insurance quotes.
- What does the homeowners general policy cover? Are flood, earthquake, and storm coverage included? What is not included?
- How much will my contents coverage include? (Provide a list of high-ticket items like art, jewelry, furniture, etc.)
- Will I need insurance riders?
- What add-ons do you offer?
- Will my homeowners coverage include assets outside the home, like stocks and savings?
- If my home is rendered uninhabitable, will you pay for A.L.E. for the time being?
- What is the rebuilding cost of my home? (You want enough coverage to restore your home if it were completely destroyed.)
- Is this an extended replacement cost or guaranteed replacement cost?
- What is the price for this coverage?
- How can I save? Do you offer any discounts?
- Can I see your license? Do you have proof of financial stability? (You should also look at their financial strength using A.M. Best or an InsuraMatch agent.)
- What is the claims history of my home? (An agent can help you find this information. This will tell you previous issues the home had, which can help you prevent and prepare for future concerns.)
- How will claims be handled? How do you settle payments?
- What does your communication look like? Do you use phone, chat, email? What are your hours? Often we recommend 24/7 operating hours in case something happens in the middle of the night.
- How would filing a claim affect my premium?
You want to consistently ask the above questions when comparing home insurers. This ensures you can make a fair and comprehensive evaluation between all companies.
And don’t forget to Google the company to see what other customers are saying in reviews. Keep in mind that most people write a review about an insurance company only when they have something negative to say. Nevertheless, if you see a repeated pattern popping up in a number of reviews, there may be something you’ll want to look out for.
Comparing home insurers helps you find the best coverage at the lowest price with the right company. You wouldn’t purchase a home without first shopping around—so you shouldn’t purchase the insurance for your home without comparing quotes.
But you don’t have to do this alone. Don’t weather the storm without someone on your side.
Contact InsuraMatch now for a comprehensive comparison without partiality. We’re here to ensure you fairly compare home insurers to find a solution that will work best for your needs.