With a new year just around the bend, perhaps you’re considering making a change to your homeowners’ policy. If that’s the case, it’s wise to do some research beforehand in order to make a prudent decision — whether that’s sticking with your current provider or making a switch.
Unsurprisingly, with something as crucial as homeowners’ insurance, there are numerous needs and costs to take into account as you weigh all your options.
Below are seven important factors to consider before you pull the trigger on renewing or shifting your policy.
- Nature of Your Residence: First, identify the category to which your residence belongs. Is it a townhouse or condo? A manufactured home? An old house? Your insurance requirements may differ based on the type.
- Umbrella of Coverage: Your run-of-the-mill homeowners’ policy will insure you against a number of adverse events. But be sure to supplement your coverage with flood and earthquake insurance if your location necessitates this. These policies are excluded from basic homeowners’ insurance.
- A standard policy will cover any theft or destruction of your personal property resulting from a home invasion or vandalism.
- Confirm that external structures — work and tool sheds, garages, etc. — are covered in your policy of choice. In the typical policy, they are.
- This is a feature that doesn’t often come to mind immediately, but be sure that personal liability is covered, as well. In the event that someone is injured while on your property, it spares you the potential financial consequences.
- A standard policy will cover any theft or destruction of your personal property resulting from a home invasion or vandalism.
- Quality of Construction: Be cognizant of how your home’s construction might affect both the variety and the associated expense of your policy.
- If your home was soundly designed and constructed with sturdy materials — making it less susceptible to the effects of severe weather — then you will be more likely to find a range of strong insurance options.
- Degree of Upkeep: Taking care to protect and upgrade your residence can pay off when it comes to your premium.
- For instance, say you reside in an area prone to hurricanes. If you go to the trouble to add hurricane shutters to the exterior of your home, your provider may reward you with a discount on the cost of your homeowners’ policy.
- Deductibles and Premiums: If it’s more important to you to have a lower premium, consider plans with higher deductibles. Conversely, if you’d rather prioritize a lower deductible, you’ll likely have to look toward higher premiums.
- Check with your lender or mortgage company to make sure that the deductible you choose is within their specified limit.
- Extent of Coverage: Do you know the value of your home? Even further, do you know the value of the valuables inside it? Do your homework to calculate the total so that the agent of your choice will be able to set an accurate value for your coverage.
- Your agent will likely issue a policy for 125% to 200% of your property value that covers the home price itself plus potential replacement costs.
- Integrity of Your Provider: Make sure that you do research into an insurance company before committing to one of its policies. Are they well-regarded in the professional community? What kinds of customer reviews have they received? Are they properly licensed?
- Never underestimate the helpfulness of a Google Search. Peruse the company’s website, check the Better Business Bureau, and consult other reputable sources.
As you evaluate your insurance options, be sure to cover all your bases before making a move. The seven areas above provide a starting point, but try to brainstorm other considerations as you approach a decision — you won’t regret being an informed insurance shopper!
