Comparing different home insurance policies calls for patience. Most people would jump to the end and compare just the annual premium they are quoted by each insurance company. This is a big mistake, knowing that the contents of the insurance policy form the basis for the coverage amounts. A substantial reduction in a single coverage amount can cause a sizable decrease in the premium. The problem will surface when a claim is rejected because of insufficient coverage under the policy.
The wise shopper compares all amounts on all policies using certain tools, such as a spreadsheet. Each insurance company should be assigned a column, each row holding the same classification. If you make exact comparisons, you can easily spot discrepancies which explain why the premium amounts are not the same. Writing notes next to each of the categories will keep you reminded as to why you excluded a specific insurer from consideration.
As you compare standard home insurance policies, keep in mind that they will probably not differ in price considerably. Home insurance companies provide discounts as a way of encouraging encourage homeowners to protect their property, such as by setting up security cameras or fire suppression devices.
Of course, a good home insurance shopper will take advantage of every discount possible. The cash you spend to install the recommended risk-mitigating measures can save you up to thousands in the form of reduced premiums. And by choosing the same insurer for your auto and life policies, you can be rewarded for your loyalty through multi-policy discounts.
The liability insurance limits are increased since insurance providers know it’s possible for the homeowner to face litigation against them. In the face of a major lawsuit, extra coverage can be made possible by an umbrella liability insurance policy, where the insured’s livelihood and property are protected from loss.
So what should you consider when making comparisons among different providers?
First, look into reputation. Look up your prospective providers’ third-party ratings online. In the U.S., for example, all insurance companies that underwrite homeowner’s policies are rated by AM Best Company. The ratings are based on actual company performance, including claim handling. Low ratings indicate that the company has a substantial amount of customer complaints filed against it.
Another thing you should consider about an insurer is its customer service model. Standard support is provided by a central customer service, a model accepted by some policyholders. Local agents provide guidance over the entire term of the policy and provide recommendations to adjust coverage when necessary.
Lastly, timely response to a claim is of course critical to any homeowner. Experienced claims adjusters give enough estimates to include needed repairs to the home.