How to Choose the Best Home Insurance Policy

Many people are not sure how to choose the best home insurance policy that fits their needs. With so many different home insurance policies on the market, each touted as the best, it’s very easy to get confused about which one is right for you. After you’ve spent hundreds of thousands of dollars on a home, you should protect your investment. I remember having a conversation with a lady a few years ago about home insurance. I explained to her that it’s smart to insure one’s home against any unexpected events and damage. She looked at me as though I was crazy. And without a smile or smirk, she asked calmly said that her home was not insured. It may be hard to believe, but some people do not have home insurance and that is another problem.

Top 3 Benefits of Home Insurance

Home insurance is a sure way to protect one of your largest investments against destruction and offers you hope so that you can start over. Still not convinced that you should insure your home? Our top three benefits of home insurance should be enough to make you change your mind about home insurance and hopefully they can convince you to contact an insurance company or broker.

1. Home Insurance Protects Your Investment

In my opinion, this is the best reason for deciding to insure your home. After you’ve spent hundreds of thousands of dollars on a property, don’t you think it’s wise to make sure that your investment is covered in the event of a disaster?

2. Home Insurance Clauses Can Offer Added Protection

If you read the fine print of many home insurance policies, you will see that there are several clauses attached to the policy. Some policies may include contents of your home or additional coverage for extraneous events which may occur on the property.

3. Home Insurance Is Cheaper Than Other Types of Insurance

If you own a vehicle, you know how expensive car insurance can be. If you compare a car insurance policy and a home insurance policy, you will realize that you pay much less for home insurance! And, if you rationalize it, it’s much easier to replace a car than to replace a house. Why isn’t your home insured? Take advantage of those lower premiums and insure your home.

Top 3 Home Insurance Myths

Are you avoiding home insurance because of what you’ve heard floating around? Many people are simply afraid to take the step towards home insurance because they have heard some rumour that may not have been true. Others purchase home insurance with the belief that it covers everything under the sun. Take a look at our list of home insurance myths and read why they may not be true.

1. Home Insurance Covers Everything

The standard home insurance policy covers your home up to a certain amount and may or may not include specific types of insurance. Some insurance companies do not bundle these policies, and as a result you will have to purchase them separately. If you have home insurance check you policy and consult with your agent to confirm what is covered and the value of the coverage. If you are searching for a home insurance policy, compare plans to ensure that you get the best policy at the right price.

2. Insuring a Home Based on the Purchase Price is Sufficient

Actually, it is not. Home owners who insure their home based on what they purchased it for, are selling themselves short in the event of an emergency. The purchase price only represents the cost of the land as well as the cost of the house, but it does not include your personal contents. Instead, you should insure your home based on the replacement cost, which what it would cost to rebuild your home in the event of a disaster. The replacement cost can be calculated by multiplying the total square footage of your home by the current construction cost.

3. I Cannot Insure My Home, Because It is Not Complete

This is not true. Many insurance companies will insure your home even if it is not completed. Incomplete homes require a special type of insurance plan (sometimes called a buildres’ risk policy) which is slightly different from the traditional home insurance policy. If you are living in the home, you should also seek to insure your contents. Some mortgage companies require an insurance policy during the construction of your home, and will offer suggestions about their preferred brokers and companies.

How to Choose the Best Home Insurance Policy

Homeowners have many different types of home insurance to choose from. Your home insurance policy will mitigate any losses and give you the peace of mind that everything will work out. Choosing the best home insurance policy can be difficult, especially when there are many insurance companies and brokers offering seeminly similar plans. Here are five tips which will show you how to choose the best home insurance policy.

1. Shop Around

Skilled and savvy shoppers know that it’s always best to shop around. Looking for home insurance is no different! Shopping around will allow you to effectively assess the types of policies on the market by comparing prices and services.  Many insurance companies offer quotes on their websites, so you can easily begin your search online, ask friends and family or look for ads online or in the newspapers. If you have questions, do not be afraid to call the insurance company.

2. Policy Coverage

The basic best home insurance policy should include coverage for hurricanes, earthquakes, fire, tornadoes, damage caused by falling trees or branches, theft, larceny and civil and malicious damage, aircraft and vehicle damage, accidental damage to glass, electrical and plumbing fittings and underground service as well as the cost of alternative lodging in the event of loss or damage. Some policies will include flood damage if it is not as a result of natural disasters.

3. Premiums

For some people like me, the premium that is attached to a policy, will have a large impact on my decision. On one hand, this may mean that my coverage may be affected and I might end up with a lesser insured value. However on the other hand, having insurance in the event of a loss, is a necessity. Some insurance companies may offer flexible terms and are open to negotiation.

4. Customer Support

When choosing the best home insurance policy for his or her needs, a home owner should assess the level of customer support available. In the event of a disaster, what type of support is available from the company? Will they be available to address you questions and offer relocation assistance? When you are shopping around, pay attention to the treatments that you receive from the staff. Are they courteous, kind and helpful. If their behaviour is less than acceptable, chances are you will not be treated properly when you need them.

5. Incentives and Discounts

In the era of “bundling” plans and services, insurance companies offer discounts to customers who have more than one policy. So, if you have a car insurance policy and looking to purchase a home insurance policy, you may be eligible for a discount. When you are shopping around, ask about these discounts. But you should note, that bundling does not always save you better and depending on the company, it might be more expensive than a using separate companies for your policies.

Do you have the best home insurance policy that you want to tell us about? Tell us who has the best deals and how you were able to score a huge discount on your policy. Submit your tips so that we can share them with other savvy spenders.

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