How to Compare Home Insurance
While it might seem strange to cover the basic process of how to compare home insurance quotes, it isn't quite as simple as it may seem, especially for those new to the home buying process, changing from one type of home to another or relocating out of state. Each of these situations presents unique home insurance needs.
- New Home Buyer: The new homebuyer would do well to compare home insurance quotes prior to actually making an offer on a home or potential property. While it isn't always practical or desirable to buy a home based upon insurance needs alone, the actual process of obtaining a quote often provides unique insights. For example, a home with a long history of claims might be a less desirable option than one that has never had a claim. Insurance can provide critical details into the history of the home, crime rate and other important considerations.
- Changing Home Types: Single-family homes, condominiums, mobile homes, apartments, vacation homes and other types of homes each have unique forms of home insurance coverage. In some cases, it can pay to obtain a quote in advance; for example, while it may be possible to purchase a mobile home for much less money than a single family residence to be used as a vacation property, the dramatic difference in insurance coverage might make the residence more affordable than it first appears. Ask your agent about different types of home insurance.
- Relocating: Moving from one state to another can dramatically affect insurance rates, even if the new home is a similar size, age and type of construction as the one you left behind. Call to compare home insurance rates prior to making the big move. States prone to natural disasters like hurricanes or earthquakes are likely to encounter higher rates than those without similar problems. For better or worse, you are likely to experience major home insurance variations when relocating from one state to another.
Learn How to Compare Home Insurance Quotes
With a little planning and preparation, it’s easier than you might imagine to compare home insurance quotes.
- Keep It Consistent: Always input the exact same information when applying for a quote. Common areas of confusion include listing one person on a quote but putting down two names on another quote. Remember, home insurance quotes are based upon many factors, including credit score and other individual characteristics. The same applies for the desired deductibles, information about the property and other data.
- Compare Brokers With Company-Specific Agents: Don't automatically assume that big wins. When it comes to home insurance, there is a wide degree of latitude in the price quote, options and referral fees paid to different agents. In some cases, you can save big by shopping around and comparing prices.
- Get the Basics: You can always add endorsements, riders and other coverage later, but for obtaining the most cost effective quote, it is a good idea to keep it simple. By asking for a basic home insurance quote, you can easily compare premiums to see which provides the most coverage for the best price.
Home Insurance Comparison: Service Matters
A home insurance comparison should include more than just price alone; it's equally important to compare coverage and service to make sure the policy meets all of your needs.
According to research conducted by the California Department of Insurance, the percentage of home insurance consumer complaints ranges from 0 percent to more than 17 percent depending upon the provider in question. Clearly, it pays to do your homework when shopping for insurance.
Some of the most commonly cited complaints leveled at home insurance providers include dissatisfaction with a proposed settlement offer, denial of claims, cancellation or non-renewal of a policy or extended delay in claim settlement.
Nearly every state has a department of insurance that compiles data about insurance companies that do business within the state borders, including total complaints received over the years, the ratio of complaints received, profile information about each insurance provider and contact information. This is a great place to begin your home insurance comparison.
Is My Insurance Company Safe?
With banks, insurance companies and other big business entities going bankrupt or requesting federal government "bail-out" funds, it is more important than ever that consumers verify the financial strength of their insurance company. If an insurance company doesn't have the financial backing and stability needed to remain solid during a major catastrophic loss, it is possible for a homeowner to find themselves without prompt payment of funds at the exact time they need it most.
To find out how safe and solid your insurance company is when comparing home insurance information it is a good idea to review their ratings by contacting one or more of the firms below.
What is Legal Discrimination & How Does it Apply to Insurance Quotes?
It should come as no surprise that there are strict guidelines prohibiting discrimination based upon race, color, ancestry, religion, sex, handicap, national origin or other protected classification. However, you might be equally surprised to learn there are some forms of "discrimination" that are actually legal.
When comparison shopping for home insurance quotes, an underwriter is able to charge more or deny coverage altogether based upon individual factors including credit history, timeliness in paying bills (including bills not related to insurance), recent bankruptcy and even the number of claims you have filed in the past.
In addition to individual considerations that may affect an insurance quote, underwriters are likely to charge more or deny coverage for a home that is older, in poor condition, showing signs of deferred maintenance or other condition problems including old wiring or roofing.
If you are dissatisfied with the insurance quote provided, be sure to ask how it was derived. If it was due to credit then you have the right to obtain a credit report and review the information to make sure it was error-free.
High Risk Properties Often Make it Harder to Find Insurance Quotes
When it comes to obtaining home insurance quotes, some properties are easier to insure than others. Few people actually take time to comparison shop for home insurance quotes prior to making an offer on a new home; sadly, that can be a big mistake. It's easy to find yourself facing higher than expected home insurance premiums, especially if you are purchasing a high-risk property. Use this handy checklist to help identify potential problems that could result in expensive home insurance for years to come:
- A bad CLUE score or a home with extensive or expensive prior claims history
- An older home with out of date wiring or old-fashioned fuses
- Real estate located in a high crime area
- A home in need of extensive repairs or maintenance, including foreclosures or rehab homes
- A home or other property that is located near the ocean, flood zone or other environmentally unstable location
- Real estate with a history of mold or extensive water damage
- A home or property without proper permits or with zoning irregularities
Home Insurance Check-Up
You take your car in for routine maintenance and schedule annual physical examinations to make sure your health is in good condition, so why not do the same for your budget? Experts suggest comparing homeowners insurance quotes at least every six months to make sure you have the right coverage at an affordable price. Here to help keep your home insurance in great shape is a quick home insurance check-up:
- Has your insurance company changed any terms since the last time your renewed the policy? It's important to read the notification letters sent throughout the year and also follow through by asking your agent if anything is due to change when renewing the policy. Don't be surprised to find changes.
- Do you have enough coverage? As the cost of rebuilding or repairing your home increases, so should your coverage. Likewise, update the inventory of your home to make sure you have adequate replacement coverage for the contents of your home, especially if you have made any significant purchases within the past six months.
- Is your information correct? Life changing events like a marriage, divorce, child going to college or other significant situations can affect your coverage needs. Verify all contact information and inform your agent about any major changes that have taken place since the last renewal.
What to Do When You Can't Get Insurance
Finding affordable homeowners insurance quotes can be challenging, especially if you live in a hurricane prone area or are purchasing a home with an extensive history of claims. Learn what to do if you have been denied insurance with these quick tips:
- Use an online homeowners insurance comparison quote service. The first place to begin is by searching beyond your original insurance provider. Even if one company denies coverage, you may still be able to obtain coverage elsewhere at an affordable rate. Take time to compare prices and obtain online quotes.
- Ask for a reason in writing. If you were denied coverage due to poor credit, it is important to review your credit files and correct any errors that may have resulted in denial of coverage.
- Correct any errors, omissions or property maintenance issues that may have prevented you from obtaining coverage. In many cases, it is possible to fix the underlying problem.
- Contact the state fund. If you are still unable to obtain insurance, then contact the state-run insurance fund in your area. Each state has a specialized insurance agency that provides insurance to those otherwise unable to qualify for coverage.
Comparing Home Insurance Quotes Checklist
Comparing home insurance quotes can be time consuming and complex, especially if you don't understand exactly what you are searching for, and haven't read up on any homeowner insurance information. Learn how to streamline the process and obtain the most favorable rates for the right coverage with this easy to use home insurance quote checklist:
- Does this quote provide replacement cost or actual cash value on my home?
- Does this quote provide replacement coverage or actual cash value on my belongings?
- How much could I save by increasing my deductible?
- Does this quote provide coverage for "increased cost to changes in building ordinances"?
- Does this quote provide coverage for inflation?
- Does this quote provide coverage for "all risks" or "named perils" only?
Special Home Insurance Considerations
When obtaining home insurance quotes it is important to include special insurance considerations that may require riders, endorsements or other additional coverage. The following are some of the most common special-home-insurance considerations that may apply to your quote.
- You have a child away at college. Ask whether your homeowners insurance covers your college-aged child's possessions, or if you need to purchase additional insurance.
- You have a teen driver at home. As a parent, you are legally responsible for your teenage driver — including potential liability coverage. It is often a good idea to obtain additional liability coverage during their early years of driving to protect your family from financial disaster should they be deemed at fault for an accident.
- You own a small business and work from home or store tools and other hardware on the premise. Don't assume your homeowners policy will cover work related expenses; instead, ask what percentage is covered and how to go about providing full coverage to dual-use items.
- You own more than one home. Vacation homes and other real estate often require a separate policy, so it is a good idea to create an inventory of what items are associated with each unit.
- Your home or possessions have dramatically increased in value over the years. Inflation can take a toll, especially when it comes to repairing or replacing older items. Be sure to inquire about inflation protection that assures you are protected against a loss.
