Not all insurance providers are created equal. Here are some of the most important things to keep in mind when purchasing homeowners insurance.
- All homeowners need insurance. The question, then, is how much coverage is necessary? The more coverage you have, the less you'll be required to pay in the case of a disaster. Some insurance providers require you to purchase a certain amount of coverage commensurate with your mortgage. Higher levels of coverage cost additional money.
- Comparing deductibles between providers is crucial. The deductible is the amount you'll need to pay for each claim. A more expensive coverage plan will have a lower deductible than a cheaper plan. An extremely low deductible may not be worthwhile if the coverage itself is too pricey.
- Understand the difference between actual cash value and replacement cost. The replacement cost of your home, for example, is the cost required to rebuild it, before depreciation. Actual cash value refers to costs after depreciation. Be wary of providers who insist on only covering the actual cash value of your home.
- Shop around and ask for discounts. Though your lender may recommend a certain provider, you are in no way required to purchase their services. Once you do find a provider, ask for discounts on your homeowners insurance in exchange for things such as installing deadbolts, alarm systems or a weatherproof roof.
- Read your insurance policy carefully, and review your homeowners insurance needs once a year.
Even with the best-selected homeowners insurance policies, insurance claim disputes between consumers and insurance companies can happen. If you have questions about an insurance claim dispute, an experienced insurance claim attorney can help.
Source: InsureUOnline.org, "10 Things You Should Know About Purchasing Home Insurance"