A Beginners Guide to Choosing the Right Home Insurance

A Beginners Guide to Choosing the Right Home Insurance
  • Opening Intro -

    Owning a home in this economy is no easy feat.

    For most people, it is both their biggest asset and investment.

    That said, whatever type of dwelling you live in deserves adequate home insurance coverage against damage and loss.

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If you’re planning to buy a home through a mortgage loan, home insurance is a most likely non-negotiable requirement. Expect your lender to ask you to carry replacement-value house insurance for the term of the loan to protect both of your investments.

But whether it is required or not; with or without a mortgage, you should always have sufficient homeowners insurance to guarantee financial protection in the aftermath of a disaster.

What is Homeowners Insurance?

Think of home insurance as a safety net that will serve as your fall back during some of the more trying times of your life. In case of fire, storm, or theft, your insurance policy can help pay for damage repairs and replacement of lost covered items.

People in the same insurance class pay for more or less the same premiums based on their perceived loss risk.

One important thing to note is that your standard home insurance policy does not cover damages and losses sustained from earthquakes, landslides, floods, and general wear and tear.

What are the types of home insurance coverage?

Standard home insurance protects more than the structural integrity of your home. Depending on the extent of the coverage you purchased, it may also cover your family and your belongings.

Types of Coverage:

  • Main structure coverage

    Your insurance policy will pay for home repairs or replacement in case of damage or destruction due to disasters or perils under your policy.

  • Additional structure coverage

    Aside from the repairs to the main building, your policy may also cover structures detached from the house like decks, outbuildings, garages, etc.

  • Contents coverage

    This includes personal belongings listed in the policy; however, you may have to purchase insurance riders for more expensive possessions like jewelry and artworks.

  • Liability coverage

    Your liability coverage covers damages sustained on another person’s property. Typically, it includes legal fees and medical expenses in case of accidents or injuries.

  • Loss of use coverage

    If your home is damaged beyond repair, this aspect of your insurance coverage will pay or reimburse your temporary dwelling and living expenses.

How to Find the Best Home Insurance

  • 1. Shop around

    Any savvy insurance shopper will tell you to compare quotes from multiple insurance providers before making the final decision.

    If you’re not sure where to find a reliable home insurance company, you can start by searching online or asking your friends and family for referrals.

  • 2. Check company reputation

    The reputation of an insurance company speaks volumes of the quality of service that they offer.

    To know whether a particular insurance provider is highly reliable, you can check third-party ratings or read up about them on online forums and social media platforms.

    The Internet should be able to provide you with the information you need to establish a pretty good insight into a company’s credibility.

  • 3. Get to know their customer service model

    Talking to their agent should give you a feel for an insurance company’s customer service model.

    A good insurance company is capable of offering prompt and satisfactory basic support to its clients. You need an agent who is more than willing to guide and assist you throughout the term of your policy and, perhaps, recommend changes in the coverage when necessary.

  • 4. Study their claims process

    When disaster strikes, nothing is more important than being able to process your claims as smoothly and quickly as possible.

other valuable tips:

That said, you must find out how fast and efficient an insurance company’s claim process is before signing with them. If you don’t know anybody with experience on the claims process of your potential insurance provider, the Internet is your next bet for valuable sources of information and opinions.

Choosing the Right Insurance Provider

Just so you know, the cheapest home insurance offer is rarely a good choice. More often than not, very low rates mean inadequate coverage; and inadequate coverage may get your claim denied because of policy insufficiency. Remember that cheap is not the same as affordable.

To avoid these risks, research your options thoroughly. Putting in time and effort will lead you to a reputable home insurance company that will offer you excellent value for your money.

Good luck!

About The Author
Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.

Image Credit: Pixabay

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Consumer Tips reference:

GUIDE: payoff your mortgage fast

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