If you are looking to buy a new home, homeowners insurance is not only important, but necessary. By having a comprehensive home insurance policy, you will have the assurance that you can pay for anything that might happen to or in your home.
Homeowners insurance really is only required if you finance your home through a bank or a lender which happens to be the majority of us.
Having a comprehensive homeowners insurance policy isn’t only for your personal items and your home, but it can also add protection if someone at your home gets injured.
Navigating home insurance policies can be difficult and pretty confusing.
Below are some 6 tips to help you find the best homeowners insurance for your particular property:
When looking for homeowners insurance, coverage is one of the most important items to consider. There are many different policies and coverage options, but they are usually broken down by the amount of protection they offer, such as replacing your valuables after a loss, natural disasters, personal property coverage and the type of property that is being covered.
Cash Value Replacement Coverage
Cash value replacement coverage will replace the actual cash value of any loss, but will also take into account the depreciation of your personal items or belongings. For example, if you own an expensive dishwasher that was damaged because of an electrical surge, than cash value replacement coverage will reimburse you the cost of the dishwasher less the depreciation from normal use.
Full Replacement Coverage
Full replacement coverage will reimburse you the total cost of the dishwasher at today’s cost. Even better (and of course, more expensive).
Guaranteed Replacement Cost Coverage
Guaranteed replacement cost coverage will reimburse you for the cost to rebuild your home if it is a total loss. This coverage will even reimburse you the actual cost even it is more than the coverage limits. It will cover the cost in today’s dollar amount.
2. Additional Coverage Options
There are many different supplemental polices that you can add to your existing insurance for even more protection and coverage.
Of course, the extra coverage will cost more, but it can also be very important if you live in an area where natural disasters might occur.
If you live in an area that is prone to flooding, you should certainly consider purchasing an add-on flood coverage or rider for your homeowners insurance policy. Most home insurance policies will not cover flood protection under their basic policy.
In states like Florida or Ohio that are prone to flooding, flood insurance will cover the physical damage from floods and losses resulting from floods, storms and even tidal surges.
Flood insurance doesn’t typically cover personal belongings, appliances or any system that might be affected which will usually be covered under a good homeowners insurance policy.
Earthquakes can occur in any state and earthquake insurance can be very valuable if you happen to have an earthquake.
Earthquake insurance will protect you against anything that happens to your home in an earthquake including repairs that are needed as well as cover structures like a shed or garage that aren’t attached to your house.
3. Your Home Valuation Should Be Updated
It is really important to keep your home valuation updated before purchasing a new policy or to update your existing policy.
If you home is undervalued, than your homeowners insurance won’t cover the total amount of the costs if something dire were to happen.
If you updated your home recently or renovated it, make sure that your coverage today will reflect the increased value.
Similarly, since your personal belongings are also protected under a homeowners insurance policy, you should continually update the value of the more expensive items such as cameras, computers, paintings or anything else of value so you know you will be covered.
4. Claims process
If you have a homeowners insurance policy, you want to know that the claims process is easy to use and that your company pays within a reasonable time frame.
The timeframe of any new claim to be paid back will depend on the type of claim as well as having all the documentation necessary to approve it.
However you can look for a few things that will certainly make the claims process a lot smoother including:
- 24/7 claims processing
- Multiple ways to file claims – on the phone, a mobile app or on-line.
- A specific time frame to approve or deny your claim
- A detailed list of what is required when filing a claim; and
- An easy streamlined process that uses updated technology.
5. Customer Service and Reviews
Your homeowners insurance company should always have great customer service and reviews.
If you are filing a claim which can be a very stressful situation, having a trained and informed customer representative will make the process that much easier. A good customer service rep will be trained enough to guide you through the sometimes arduous process with patience and empathy.
6. Get At Least 3 Quotes Before Making a Decision
Just like any other insurance you purchase, make sure to get a least three quotes before making a decision.
Take some time and think about what you might need in a homeowners policy in terms of coverage for your particular home and the area where you live.
By shopping around and becoming more informed about the different coverage options and pricing, it will help you get the best deal and coverage for your particular home. And, of course, make sure to find out exactly what your new policy covers before enrolling.