How to Buy Homeowners Insurance

Posted on December 3, 2012 | Category :Uncategorized | No Comments

Many people often wonder whether having homeowners insurance is necessary, especially considering all the other expenses that accrue from owning a home. The answer to that question is: homeowners insurance is far from useless; in fact it is highly essential. A good homeowners insurance policy is a good safeguard against many of the possible mishaps that could happen to your home such as fires, accidents, break-ins and so on. While it is quite true that having homeowners insurance is not a legal requirement, many mortgage lenders require their clients to have one. Additionally, people who live in condos or a co-op might also be required by their tenants’ associations to own a policy.

The first thing you should do is get a price guide from your auto-insurance company. Buying an auto-insurance policy as well as a homeowners insurance policy from the same company is strongly recommended since most insurance companies offer substantial discounts to clients who have both. If you work with an auto-insurance agent, you can ask them to give you several quotes from different companies. It is also a good idea to contact large insurance firms that do not use independent agents directly. One example of such firms is State Farm. People with military connections in their families can contact USAA.

Before you can start comparing different quotes from various companies, you need to decide the amount of insurance coverage that you need. The value of home insurance is determined by how much it would cost to rebuild the house and not by the market value of the house. Rebuilding costs are generally on the rise in many parts of the country. A number of online resources such as AccuCoverage.com help individuals to calculate their rebuilding costs. Of course, you have to provide them with information to work with including the size of your house and building materials. Your insurance agent can also help you to calculate your rebuilding cost.

Homeowners insurance companies usually provide insurance coverage on your household possessions. The amount of coverage provided is typically a percentage of the value of your possessions, 75% in most cases. This means that if your household possessions are valued at say $200,000, you can get insurance coverage worth $150,000 on these items from your homeowners insurer. It is important to note, however, that the amount of coverage provided for certain items such as jewelry is usually limited-many insurance companies peg the amount of coverage on jewelry at about $2,000 or $3,000. If you have highly valuable possessions, it is advisable to get additional coverage for them.

The next step is to figure out how to reduce your premiums. One way you can do this is by choosing your deductible amount, which should ideally not be less than $1,000. Having a deductible is a good check for you to deter you from filing unnecessary compensation claims that could potentially lead to your insurer dropping you or make you incur a claims-free discount.

Now it is time for you to settle on one insurer. You can check the company’s complaint record by looking it up in the Consumer Information Source of the National Association of Insurance Companies. After all, you do not want to go with an insurer who will hassle you unnecessarily whenever you file a claim.

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