Making a decision regarding insurance for your home and contents is very important. You should be sure that you understand the coverage that is available so you make the right decisions to protect your property.
Understanding the amounts and types of policy limits are also important. You may find that you have too much, or not enough of a specific type of coverage.
There are many different insurance companies in the marketplace, all with their own unique products. You should ensure that any insurance companies that you deal with are licensed or authorized to do business in the state where you live. Additionally, agents and brokers will typically be required to carry a license as well. If you are not sure, check with your state insurance department.
When shopping for insurance products for your home, be sure that you look at a company’s service level as well as their price. The old adage that “you get what you pay for” rings true with insurance as with any other products. Sometimes the lowest price is not the best deal, as you may find out when you attempt to make a claim and find poor service.
Compare at least three different companies and be sure to look at price, consumer reviews, and the rating of the company. There are rating companies such as AM Best, which are in the business of evaluating insurance companies. The ratings they provide can be a good guide in your comparison-shopping. Be sure to review the types of coverage and the limits offered by the insurer’s you deal with. A lower price may often mean less coverage.
When comparing the coverage provided for a homeowner’s insurance policy, you should understand that there are several coverage parts. The first three generally deal with property you own. Coverage A is for your house. It will cover the building only. Coverage B is for “other structures” on your property such as detached garages or sheds. Coverage C is for contents, or personal property. Your policy will assign a specific limit to each of these items so be sure you know what the buildings on your property are worth, and what all of your contents are worth.
Aside from limits, you should also be aware of what type of coverage you have. Some policies are “named peril” policies, which cover a list of causes. If there is damage to your home that is not caused by something on the list, you have no coverage. The other type of policy; commonly called a “special form” policy provides coverage for any loss unless it is excluded. The policy then goes on to list the types of losses that are not covered. However, under this type of policy contents are usually covered on a named peril basis.
Understanding these basics will help you wade through the insurance purchasing experience a little easier. Be sure to ask questions and take notes. Comparing products carefully will payoff in the event of a future claim with your new insurance company.