Tips on Shopping for Homeowners Insurance

Shopping for Homeowners Insurance can be quite confusing.  And many people don't understand that not all homeowners policies are created equal.  With home insurance premiums on the rise, price is certainly a factor to consider.  But you also want to make sure that your most valuable possession is going to be properly protected in your worst case scenario...a total loss.  An insurance policy is worthless if it isn't there when you need it.  There are a few important things to consider when reviewing your options.

Dwelling Value - In most instances, your dwelling value should be an estimate on what it would cost to rebuild your home, at today's prices, if that were needed.  Note that this value may be completely different from your home's market value or tax value.  Each insurance company uses it's own software to calculate reconstruction cost.  The more details they gather and enter into their software about your home, the more accurate the dwelling value.  Be careful, because you don't want to be under insured if you ever have to rebuild your home.

Deductible - This is probably your biggest area to reduce your premium.  The lower the deductible...the higher the premium.  And vice versa.  Your homeowners insurance is not designed to be a maintenance policy.  It's for the big stuff.  Problems with your home will happen that may or may not be covered by insurance.  You don't want to file a claim for every little problem that arises with your home.  Your premium could increase with too many claims and you soon might become too risky/expensive to insure.  Weigh your deductible options and choose the one with the best value that is still within your budget if something were to happen.

Limitations - Every policy will have special limits on certain types of property that they will insure and also on different types of perils, or causes of insurance claims.  These limitations can make a big difference in understanding and selecting your home insurance and can often be overcome with endorsements (additions) to your policy.  Here are some of the most common limitations:

• Special Property

• Jewelry
• Firearms
• Collectibles
• Antiques
• Art
• Electronics
• Perils
• Wind & Hail
• Sewer & Drain
• Water Damage
• Theft

The bottom line is that price matters, but protecting your home properly should be the most important thing for you.  You've worked hard for it.  So take the time to understand your policy and find an agent that your are comfortable working with and will help you through the process.