While shopping for homeowners insurance, you need to understand that there’s a wide array of options to choose from. A standard homeowners policy serves as a strong foundation that includes bodily injury, property damage, and other third-party liabilities. From there, you can customize your plan with extensions. Here are important tips to assist you in deciding what is to be included in your coverage.
Choose the type of coverage
One of the most important homeowners insurance tips is to learn about the differences between all-risk policies and named perils policies. All-risk policies cover all perils that a plan does not exclude, whereas named policies provide coverage limited to stated perils. If you are financing your home, the lender may require you to carry an all-risk policy.
Pick an amount
Next, you’ll need to determine your coverage amount based on risks that affect you and your region, such as the possibility of severe weather. Using a home inventory app will make the process easier.
Don’t just settle on the first quote you get because each insurer sets their own rates, and you may be able to find a better deal. Get several quotes and then compare plans based on your needs and budget.
Look at the insurer’s record
Research the insurance company’s history to ensure it’s not a fly-by-night operation. Check online reviews to investigate how well they take care of customers who file claims.
Choose a deductible
Your deductible is the amount you initially pay when you file a claim before your coverage pays the rest. Raising your deductible lowers your monthly premium.
Ask about discounts
Insurance companies typically don’t advertise discounts but make them available anyway for eligible customers. Ask your insurer for a discount, especially if you are a student or have an excellent driving record.
Check the insurer’s license
Make sure the insurer is licensed to operate in your state. Contact your state insurance department if you have questions about the company’s status.
Avoid coverage gaps
If you decide on switching insurance agencies, make sure to keep your old policy active until you activate a new one. Coverage gaps can be costly if they occur during disasters.
Consider other coverages
Consider extended coverage for certain events that aren’t covered in your standard homeowners plan. While standard plans might cover certain flood damage, they don’t necessarily cover all types of flooding, so you’ll probably need a flood coverage extension.