How Do I Choose a Homeowners Insurance Policy in 2023?
You can also get a discount if your home has a sprinkler system, smoke detectors, hurricane shutters, or a security system.
Quote tools are often available on the websites of insurance companies. All you have to do is type in some basic information about your home and what’s in it.
Credit rating agencies like AM Best can tell you about the financial health of the insurance company you choose. Financial strength is important because you want to choose a company that will still be in business and can pay claims if they are needed.
You should also pay attention to professional ratings and reviews, like our list of the Best Homeowners Insurance Companies of 2023. These reviews can tell you how responsive a company is when it comes to handling claims or answering questions.
When picking the right homeowners insurance policy, you need to make sure that you have enough coverage to replace your home and its belongings in the event of a disaster.
It can be hard to read through and understand a policy, which is another good reason to talk to a professional.
Assuming you’ve figured out how much it would cost to rebuild your home and made a list of everything in it, you already know how much coverage you need. Then it’s just a matter of getting quotes from reputable homeowners insurance companies in your area that offer the right amount of coverage.
Take advantage of discounts that are available, such as when you bundle your home insurance with your car insurance. Make sure to get enough coverage for your collectibles and jewelry, and think about getting extra coverage for high-risk items like a swimming pool.
As simple as that sounds, many homeowners either don’t do enough research or don’t buy enough insurance for their needs. Ommen says that a lot of people don’t read their policy until after something terrible has happened. “It’s too late if you wait until your basement is full of water.”
Lastly, every expert we talked to agreed that buyers should look for a replacement-cost policy instead of a cash value policy. Replacement cost policies cost more, but they will pay for the real cost to rebuild your home and replace its contents.
A cash-value policy, on the other hand, will only pay you back the current market value. Depending on how much your home cost to build, if zoning rules have changed since it was built, the rate of inflation, and other factors, a cash-value policy could leave you short.
“With replacement cost, you might pay 10% to 15% more for coverage, but when you make a claim, you get a lot more,” says McChristian.
How can I lower the cost of my homeowner’s insurance?
Once you’ve chosen an insurance company and figured out how much coverage you need, you might be surprised at how much your premium is. There are, however, ways to pay less for your home insurance. The Insurance Information Institute (III) says the following are good ways to save money.
The III says that if you raise your deductible from $500 to $1,000, it can cut your premium by up to 25%. Upgrading your roof and windows to make your home more weather-proof can reduce the chance of storm damage and the cost of fixing it. Some of these improvements are impact-resistant roofing materials and shutters.
It can also pay off to be a loyal customer. The III says that policyholders who stay with the same insurer for five to ten years can get 5% to 10% off their premiums.
Adding smoke detectors, a basic home security system, and deadbolt locks can also lead to a small discount of about 5% on your insurance premium. Installing a sprinkler system or more advanced security devices, like ones that call the police if there is a problem, may help you save more money. Visit our guide to the Best Home Security Systems of 2023 to find out more.
Taking care of your home can also save you money. Slips, trips, and falls can be stopped by fixing things like loose decking, uneven stairs, or cracked pavement. Cutting back tree branches that hang over your roof can reduce the chance that a branch will fall on your roof and cause damage during a storm.
Should I get my home and car insurance from the same company?
Many of the insurance companies we rate let their customers bundle their home and auto policies, which can also lower their premiums. Depending on the insurer, you may also get a discount if you buy more than one type of policy at the same time. For example, Allstate allows policyholders to bundle homeowners insurance with term life insurance and auto coverage. Geico, on the other hand, lets you bundle home and motorcycle coverage.
Experian, a credit agency, says that bundling may not be the best way to save money if you have a hard-to-insure car, bad credit, or a spotty driving record.