(5/10/2012) Wondering how to find the best home insurance for you? With a little background information, and a few insider tips, you can find the best coverage for the best price.
KNOW REBUILD COST
What would it actually cost to rebuild your home? It's a question that may be unpleasant to think about and tough to answer, but it's necessary to find the most appropriate insurance for you. Seek out insurance for the total replacement cost of your home if it were to be totally destroyed. To do this, you have a few resources. A local builder will inspect your home and provide an estimate, usually for a flat fee. Also, an insurance or real estate agent can help estimate total cost by looking at construction quality, special features, and details like antique wood, glasswork, moldings, etc.
KNOW INSURANCE TYPES
A variety of different home insurance policies exist, and knowing your options goes a long way towards finding the best quotes. The most typical policy for single-family homeowners is the HO-3 policy, which covers your home and its contents in most cases of damage, and covers liability if anyone gets hurt on your property. HO-5 is slightly more comprehensive in terms of coverage, and HO-6 covers condos. For all types, additional “riders” can be purchased which provide coverage for specific valuables, along with damage from flood, earthquakes and other natural disasters.
KNOW COVERAGE OPTIONS
Along with type of insurance, you will also select amount of insurance. You can ultimately get coverage for up to and including 100% of your home's replacement cost, which is the recommendation made by most experts. For your home's contents, you can usually select coverage for up to and between 50-75% of the home's value.
In addition, you will need to choose a deductible amount, the price you will need to pay in case of damage before insurance kicks in. Picking a deductible can be challenging - a higher deductible means lower monthly premiums. But it also means a substantial out-of-pocket expense at a time when expenses and emotions are already high. The right balance is up to you, your financials, and your risk tolerance.
KNOW WHERE TO LOOK
Seeking out insurance quotes has never been easier thanks to the web. Look at the websites for key insurance companies to get free quotes, or visit free databases like InsWeb, which offers quotes from up to 8 insurers. Also, check out your state's website. Most state insurance departments help you shop for insurance quotes with online shopping guides.
KNOW THE COMPANY
Once you've narrowed down a few companies providing quotes, how do you choose? Research how a company will handle your claims by looking at Consumer Reports rankings. Look at financial strength of the company - if it has received an A rating or higher from Standard & Poor's or an AA ranking or better from Moody's Investor Service, you can feel confident in their financial strength.
With this background knowledge, and with a little persistence, you can narrow the field of home insurance quotes to find the best solution for you.