In conjunction with my latest podcast, I am presenting some information on how to buy homeowners insurance. If you would rather listen to it, feel free.
First, where can you buy insurance? Easy. Call around to several agents and brokers and ask for quotes. You can get names from friends, relatives, and any associations you may belong to. You want to talk to several people because you will get a variety of quotes.
Second, how do you choose an insurance company? After you get your quotes, you want to check with the Department of Insurance and with AM Best. The Department of Insurance will provide you with information on the number of complaints. AM Best provides information on the financial stability of the insurance companies and whether they can pay claims. Do not shop on price alone. Use a combination of these to pick. (And if you have a question on one, send me an email. I would be happy to provide my opinion.)
Third, how much insurance do you need? This is tricky. Some insurance companies undervalue your house. In other words, they give you less insurance then you need. This decreases your premium, but in the event of a total loss, you are stuck. Some insurance companies overvalue your house. In this case, they give you more insurance than you need. This increases your premium substantially. How do you protect yourself? Find a contractor and have them give you an estimate to rebuild your house. This may cost you $50 or $100, but it is well worth the investment.
Fourth, how can you save money? You may want to increase your deductible. An increase from $500 to $1,000 can save you 25% on your premium. You also want to ask about available discounts, including alarms, being near a fire hydrant or fire station, sprinklers, or membership discounts. Also ask for multi-policy discounts.
Fifth, do you need to insure your jewelry separately? Probably, if you have more than $2,500 in jewelry. However, ask your agent. Some policies provide different amounts of coverage for jewelry. They also limit coverage for guns, collectibles, musical instruments, and silverware. Ask about any “sub-limits.”
For more information, visit my podcast or email me! Happy Buying!