How to Compare Homeowners Insurance

How to Compare Homeowners Insurance

covers damage to your property while also providing you with protection against legal liability for injuries/damage incurred on your property. Figuring out how to compare home insurance policies can be difficult and overwhelming.
A good way to compare homeowners insurance policies is to look at the policies themselves, the cost of each policy, and the quality of each insurance company. There is a great deal of variance in terms of what policies are available and how much they will cost.

 

Insurance is state-regulated, so a lot of options and offers will differ from one state to another. Talk to an insurance agent in your area to get a better understanding of what your state requires/permits.

Compare coverage.

Depending on where you live and what policies are available to you, you should have a lot of options in terms of coverage. Some incidents are not covered by standard homeowners insurance, and will require a separate policy (if one is available in your area).

Talk to the agents you’re considering and read through your coverage to see what each policy would protect against. Common coverage articles include damage caused by:

fire
lightning
windstorm/hail
explosions
smoke damage
sudden or accidental leaks from plumbing, heating, or air conditioning
rain through a damaged roof, window, or door
backed up sewers/drains
frozen plumbing/pipes
broken heating system
mold
falling objects (including trees)
weight of ice, sleet, or snow
animals
construction defects
acts of vandalism
Homeowners Insurance

See what’s excluded. Most homeowners insurance policies cover basic accidents, man-made damages, and some natural causes of damage.

However, some natural disasters are typically not covered by a standard homeowners insurance policy, including flood damage and earthquake damage.

Most policies are either open peril or named peril policies. Open peril means that your policy covers every possibility except the ones specifically excluded, while named peril means that your policy only covers what is listed.

Earthquake damage is almost never covered.

Flood damage is seldom ever covered by a standard policy, even when the flooding was caused by a windstorm. Flood damage may include damage caused by an actual flood, rising water, surface water, tidal water, or tidal waves.
You can purchase flood insurance as a separate policy, either through your homeowners insurance provider or through the National Flood Insurance Program.

The contents of your home may or may not be covered by flood insurance, so be sure to talk to an agent before finalizing your insurance purchase.

Examine additional coverages. In addition to natural disasters (especially earthquakes and flooding), many homeowners insurance policies do not cover mold problems or sewage backups. Some policies do cover these problems, but limit how much you can claim for these damages.

Ask your provider about adding on specialized coverage for these problems, if you believe they may be an issue.
Sewage backup coverage only costs an average of $40 to $50 per year, but mold insurance (when available) is often much higher.
If you live in an area where these problems may arise, you’ll have to balance the cost against the risk to determine if this type of coverage is right for you. Read More

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