Before you closed on your house, no doubt the lender required you to get a home owner’s insurance policy. For many couples this was the last time the checked out rates – lives can be so busy that comparing home insurance rates seems trivial. However, you are not only possibly spending more than you have to on home insurance, you may also not have enough coverage for your family’s needs.
We recently compared similar policies with different insurance companies for our house. I want to share some tips that have helped us and hopefully you with getting a better deal on home insurance.
Finding the Right Amount of Coverage For You
No one wants to be under or over insured. When you’re under-insured you’re putting yourself in serious financial danger should something happen with your home. The inadequate coverage means that you have to foot a big portion of the bill yourself (which with a home, can be tens of thousands of dollars or more) and for many couples it’s simply out of their budget.
On the other hand, being over insured means that a portion of the premiums you are paying for insurance could instead be used for other financially important things without harming your family’s needs. It’s a balancing act that thankfully can be maintained if you’re willing to shop around once a year or so.
So how do you figure out how much home insurance you need to get for your place? The best place is to start with what you have. Pull out your current policy’s paperwork and check to see what you coverage is for your place right.
Once you have that paperwork in front of you two, look at some possible factors and scenarios that insurance companies weigh when giving quotes. By having that information you can make sure that you’re getting rates for coverage that you need.
- Look at your home’s age: Typically the older your home is, the more likely that an old pipe might burst or another repair will be needed. Unless you have the savings to cover such a big repair, make sure the policy you have can handle it.
- Neighbors: If you’re curious about claims that you may have to make, check with your neighbors who’ve had recent problems with their homes as their home was probably built around the same time as yours. Ask them about how much repairs were. The idea for home insurance is that you get enough coverage to rebuild and replace everything should you home burn down. Having realistic numbers will give a better idea of what you need from your policy. If your neighbors are reluctant to share, you can always get some ball park figures by researching online for similar repairs and replacements.
- Your possessions: Besides insuring your dwelling, your policy should have coverage for replacing your possessions. To know if you have enough coverage you two should do an inventory of your personal property. While you’re doing so, go ahead and get some photos and receipts of these items should an unfortunate event happen. You can use free editions for services like Evernote to store.
You may discover that you may have to change some coverage amounts on your policy so you’re not under or over insured based on your review. Don’t worry if you are still working with estimates, we’re trying to avoid grossly overpaying or getting inadequate insurance.
Shopping Around for the Best Price on Homeowner’s Insurance
Once you figure out a ballpark of what is the right amount of coverage for you, it’s time to start checking around with insurance companies for quotes on home owner’s insurance. You really want to have an apples to apples comparison, so my advice when you’re looking at different offers is to have your current policy in front of you.
To make it quick and easy for you when comparing insurance quotes, here are the sites and phone numbers of the big insurers:
- Ameriprise: 1 -888 -239-9953 (If you’re a Costco member you may get additional benefits with Ameriprise.)
- USAA: 1-800-531-8722
- State Farm: 1-800-782-8332
- Liberty Mutual: 1-800-837-5254
- Farmers: 1-800-327-6377
- Allstate: 1-800-255-7828
- Nationwide: 1-877-669-6877
- Progressive: 1-800-776-4737
- Geico: 1-800-841-2964
When you’re talking to an agent to get a quote, there are a few things to keep in mind so you’ll get the best rate the first time you call.
- Your Home: The type of home you have can have can affect the policy you need. A single family home needs insurance to rebuild the exterior and interior while a condo policy may only cover interior damage. If you do have a condo, please check with your home owners association and state to see what is covered.
- Deductibles: When getting quotes from the company ask for the same coverage amounts, but change the deductibles to see if there is potential for significant savings. Some home owners find that switching from a $500 deductible to $1,000 or $2,500 deductible can be worth it. Before switching though make sure you have money saved for an emergency like that.
- Replacement Cost vs Actual Cash Value: Check with agent that should your personal property (such as electronics, furniture, and appliances) need to be replaced that you will get enough to buy a new comparable item. Replacement cost coverage will do that for most home owners while actual cash value may leave you short.
You will also want to mention if you’re nearby a fire station, have a home security system, or have a fire extinguisher in the house to see if you can get additional discounts. Finally if your representative doesn’t tell you upfront, ask them what events are not covered. Flood or earthquake insurance may have to be added to your basic policy. If you are members of any professional or retail association, such as a Costco, ask to see if you can get an additional discount.
Bundling your insurance plans (home and auto) can also give you a bit of savings (but not always, so check first). If you also currently have a life insurance policy, you should check if you get a discount for adding a homeowner’s policy with them. Most major insurance companies offer something to attract more of your business, so take advantage of that.
If you want to get all the discounts you’re entitled to then ask, ask, ask. It’s your home and your money on the line.
Thoughts on Getting Home Insurance for Your House
For us checking around for a better deal on insurance proved to work in our favor. When I called to get a rate on our home owners insurance I found that by switching over to Ameriprise (where we have our cars insured) we would get much better coverage (we were under-insured for the dwelling coverage on the townhouse) for a small increase ($30/year after accounting for the discount on our auto insurance).
How about you? What is your current rate for insuring your home? What type of policy do you have on your home? I’m curious to see how many of you compare prices and policies and how often.