For most homeowners, carrying proper insurance will be a requirement of the mortgage company. However, even if you don’t have a mortgage, home insurance is still an essential investment. When choosing a homeowner’s insurance company, it is important to review your options carefully to be sure you have made the right selection.
Understanding policy differences
Not all homeowners insurance policies are the same. While most policies include the same basic coverage, there may be subtle differences. Also, if you need unique add-ons to your policy, you will need to request them explicitly. Requesting these add-ons will typically result in a higher premium.
Some of the standard types of coverage typically included in homeowners insurance policies are:
- Damage to the main home.
- Damage to other structures on the property.
- Loss of personal property or damage to personal property.
- Medical expenses.
- Personal liability.
- Additional living expenses incurred when you can’t use your home.
Qualifying for coverage
Every home insurance company determines its own underwriting rules and requirements. Certain characteristics or past experiences may prevent you from obtaining coverage from some insurers. For example, if your home is located in a high-risk area or possesses certain risky characteristics, some insurers may refuse to provide coverage. Likewise, if you have a criminal history, a record of multiple home insurance claims, or some other characteristics that makes you seem like a high risk to the insurance company, you may be denied coverage.
Because requirements vary by company, it is a good idea to consider multiple providers if you are worried about disqualifying factors.
About home insurance premiums
Home insurance companies consider multiple factors when determining the cost of your insurance premiums. In most cases, these companies begin with a base rate and then make additions or subtractions based on your unique situation.
Some of the factors that will impact the cost of your home insurance premiums include:
- The value of your home.
- The age of your home.
- Your home’s location.
- Your home’s protection class, which is a factor based on your distance from the nearest fire station, as well as the fire station’s quality.
Insurance premiums will also vary based on the company you choose, so it’s important to compare multiple quotes before you choose to be sure you are getting the best deal. However, it is also important to keep in mind that not all insurance companies are created equally. Some insurance companies are considered more financially strong than others. To compare the financial strength of different insurance companies, consider the ratings provided by third party agencies like A.M. Best Company Inc.
Why you should consider an independent insurance agency
When you are looking for the right home insurance company, working with an independent insurance agency can offer many benefits. An independent insurance agency represents multiple companies, allowing you to investigate several options at once. An independent insurance agency can also help you compare your options more fairly and accurately so you can be confident in your choice. Please call Long & Company today to get started.