3 things to keep in mind when comparing home insurance prices

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Buying home insurance is no fun. At best, it’s overwhelming. At worst, it’s frustrating. This explains why a 2019 PolicyGenius report found that one in three Americans never shop around for home insurance a second time after paying their initial policy. As an inevitable cost associated with a mortgage, most people only invest their time once in finding an insurer that is right for them.

But during the life of a 30-year mortgage, a lot can change, so how about your home insurance? Don’t let fear or frustration keep you from finding the best coverage to meet your current needs. Here are three things to keep in mind when weighing your options.

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1. Read your current policy.

It is not enough to know your policy when you first bought your home. You need to know what the current conditions are right now. Year after year, renewal terms change and very few people take the time to read the fine print. The premiums may have gone up, while the limits may have gone down. To find price comparison sites, you need to set the baseline on what you are currently getting. Take out your most recent policy and actually read it. Know the common sense of the applicable terms:

  • Premium: The monthly or annual fees that you pay for the insurance.

  • Deductible: The payment you must make before your insurance takes effect.

  • Personal property: The contents of your home, such as furniture, clothing, electronics, etc.

  • Riders: These are additional policies that you can purchase to cover specific items that were not originally included in your insurance coverage.

  • Sub-limits: Standard home insurance policies include limits, but there are also sub-limits. The personal property sub-limit is generally 50% of your residential coverage. There may be sub-limits on wind and water damage.

Check additional coverage for floods, hurricanes, tornadoes, etc., based on natural disasters common where you live. Also consider things in your home that others in your area might not have: the sump pump and fine art cover, for example, are additions that may or may not be worth your time.

Other subtleties also matter. Do you have indoor and outdoor coverage? Do you have personal liability insurance? What are the expected payments and will they be sufficient, based on the current market value of labor and materials for this type of repair? Does the current insurer pay up to the price of the house when you bought it or the current market value or the full cost of rebuilding? The devil is in the details.

2. Buy options, not restrictions.

Alan Himmel, claims adjuster and founder of Florida Allstar Public Adjusting Inc., advises people to be aware of potential pitfalls and opportunities. While it is possible to buy a font that is 50% cheaper than everyone else, he says to be wary of fonts with restrictions or limitations.

“As a claims adjuster, one of the things I see very often is managed repair programs,” he says. In return, you accept a discount on your policy, as long as you allow the insurance company to send its own contractors and workers to perform the repair. He says the problem is then the insurance company checks the claim; they decide how damage is defined and how repair is carried out.

“It sounds okay at first glance, but you have to remember that your insurance company’s goal is to pay as little as possible,” Himmel recalls. “With the Managed Repair Program, you now have less weight to discuss damage to your home. Worst case scenarios put insurance companies and repair services on the same team, sharing the goal of keeping repair costs low, although a better solution may be available.

Himmel also says to watch for sub-limitations on water damage coverage. While a policy may have $ 500,000 in coverage for loss or damage to your property, it may have much less coverage for water damage.

“Since the vast majority of all claims are due to water leaks and broken pipes, it wouldn’t make sense to buy a policy with this restriction,” Himmel said. “Even the most basic water damage in a kitchen can amount to at least $ 10,000. This limit almost always leaves the owner short and can be financially devastating. As a claims adjuster, unfortunately, we see this every day. One of the biggest problems is that people don’t find out they have these restrictions until they have a claim. “

Instead, look for good discounts that include those for home upgrades such as a new roof, a monitored alarm system, and glass or hurricane shutters. And keep as many options as possible available for repair.

3. Know what adequate coverage means to you.

Shopping before signing a policy will not only save you money, but can also add value in an emergency. The rule of thumb is to send your existing policy to three different companies to find matching or better quotes, but some say go up to five. Each insurance company will have quite different prices, and the details and features of your home may be valued differently by each company.

Of course, the key to finding the right coverage is not just getting a lower price, but also getting more benefits. This means that you need to know the replacement value of what you own. Get an appraisal on jewelry and art. Check receipts for electronic devices purchased in the past five years; if they are damaged or stolen, you will want to replace them.

If you’ve installed a trampoline or swimming pool, tell insurance representatives and find out which coverage is right for your family. The Insurance Council of Texas suggests shopping around with old insurers and some of the new insurance companies.

When looking for the right insurance company to sign a policy with, take note of the various factors that could cause price differences. Ask follow-up questions to tailor your quote to your needs. Your credit history may also play a role in determining the price of your policy, so ask the insurance representative directly if you should be working on improving those numbers. Even try to bundle auto, home and umbrella insurance for greater savings.

Don’t commit to a cheaper policy until you’re sure it has all the coverage you need today.

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