Home Insurance | What homeowners need to know

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What homeowners need to know about Home insurance4u

If you’re looking for the best home insurance in 2016, there are plenty of national and local insurance companies that will want your business. However, it’s hard to decide which company to pick with so many choices.Companies like Amica Mutual stand out in customer surveys, but they aren’t available everywhere. The best way to find fair rates on homeowners insurance is to get free online quotes from a variety of companies. This is the easiest way to understand what rates you might face.There’s more to take into account than just price, but it’s a good starting point. I’ve included a quote tool below so you can shop around right away. Enter your zip code in the box and click “Get Quotes” and you’ll be presented with a list of 3-5 of the best homeowners insurance companies in your area. You can research policies from each provider and determine which is the best fit for your home and your budget.

Homeowner’s Insurance Comparison

Although Amica ranks highest in customer satisfaction by J.D. Power, companies like State Farm, Liberty Mutual, and Allstate also rank well in these areas and are worth considering.

There are many reputable national carriers offering similar types of coverage. To find the ideal option for you, the best way to start is by getting an online quote to get an idea of the average rates and companies offering insurance in your location.

What Does Home Insurance Cover?

The main reason you buy an insurance policy is for the coverage it provides. State Farm stands out for offering excellent coverage options, some of which include:

Dwelling Coverage: The part of your policy that helps pay to repair or rebuild your home if damage is the result of a covered loss. Critical home components like plumbing, electrical wiring, or your HVAC system fall into this category.

Liability Insurance: Helps protect your assets and cover costs associated with a lawsuit when you or a family member are responsible for injuring another person, or if someone is injured on your property. (For example, if your dog bites your neighbor.) It also provides coverage if you or a family member causes damage to another person’s property. $100,000 is a good benchmark for liability coverage, but this will vary depending on the size of your home and the assets you need to protect.

Personal Property Coverage: Covers your clothing, electronics, furniture, and other personal property that is damaged or destroyed by a cause that is covered by your insurance. Most top insurance companies provide checklists, personal property calculators, or other resources to help you document your belongings. For example, Liberty Mutualprovides a mobile app where you can upload pictures, receipts, and more.

Guest Medical Coverage: Provides coverage for medical bills and related expenses when someone is injured on your property, but they do not want to sue you. $1,000 per person is a common level of coverage, though some homeowners choose to take out an extension for added protection.

Most of the top homeowners insurance carriers offer similar types of coverage. The best way to find the right homeowners insurance package is by comparing rates and coverage options through an online quote.

Factors that Influence Home Insurance

There are several factors that influence the cost of your homeowners insurance policy. You won’t be able to change or control many of these factors. However, identifying the characteristics you can modify and making the appropriate adjustments can help you keep your rates low. The most common factors that influence your homeowners insurance premium include:

Home’s age and type of construction: If your home is older, there’s a higher chance there will be problems with major components like plumbing, electrical wiring, and HVAC systems. New homes are less susceptible to these major problems.

Location: If you live in an area prone to natural disasters, with a relatively high crime rate, or located far from emergency services, expect to pay more for your policy.

Claims History: If you file several claims a year, you are more likely to pay a higher premium.

Risk Factors: If your home has a swimming pool, aggressive dog, trampoline, or other characteristic deemed risky, you’ll likely pay a higher premium.

Credit Score: Your credit score (whether good, bad, or average) has an impact on the price of your policy.

Deductible: The level of deductible you choose plays a role in the price of your coverage. If you choose a high deductible, that means you have to pay more out of pocket if an incident does occur. The trade-off is a lower premium. (As a side note, I recommend sticking with a deductible you’re comfortable with. If your home is damaged, coming up with $1,000 is probably manageable. Coming up with $2,500 or $5,000 is probably going to be more difficult for most of us. Remember, your insurance won’t kick in until the deductible is met.)

Choosing the Best Homeowners Insurance Company

In order to get the most accurate estimate of what your homeowners insurance will cost, I recommend utilizing the online quote tools found on the insurer’s website or the comparison tool I included at the top.

To give you an idea of what insurance prices look like from some of the best insurance providers, I got a quote for a home in a Chicago suburb.

Amica: $75.33
State Farm: $117.75
Liberty Mutual: $129
Farmers: $150

The great thing about online tools is that you determine the exact type of coverage you want, select the level of your deductible, and choose the payment terms. It might take a little extra legwork, but online quote tools really do put the power in your hands to find the cheapest policy.

Many online tools, like the one provided by Liberty Mutual, enable you to modify the coverage levels you select, so you can clearly see how changing one component directly impacts the price of your policy. (For example, you could enter a low value for your deductible, see what your rates look like, then enter a high value and see how your rates changed.)

Homeowners Insurance Discounts

All of the best homeowners insurance companies offer a variety of discounts. If you fail to take advantage of these discounts, you’re just leaving money on the table. To give you one example, if you took advantage of a multi-policy discount and bundled the same State Farm home insurance policy quoted above with an auto insurance policy, your monthly rate would drop from $117.75 to $76.50. That’s almost $500 in savings per year!

Some of their discounts include:

• Multiple-policy Discount: Available if you have an auto, life, or other type of insurance policy with the same provider.
• Protective Device Discount Available if you have a home security system, sprinkler systems, fire alarms, or other security devices in your home.
• Claim-Free Discount: Available if you haven’t filed a claim over a certain period of time.
• Exclusive Group Savings Available if you have membership or affiliation with certain businesses or organizations. Liberty Mutual’s group savings network includes more than 14,000 employers, alumni associations, and professional associations.
• Early Shopper Discount: Available if you request a quote before your current policy expires.
• Insured to Value Discount: Available when you insure up to 100% of the cost to replace your home.

The best homeowners insurance companies offer a high number of discounts, helping you keep your premium low. If you’re unhappy with your current policy or feel like you’re paying too much, you can always get a quote with a new provider that offers discounts that better match your profile.

Claims

The circumstances that surround filing a home insurance claim have the potential to make the whole ordeal quite stressful. When your home has been damaged, the last thing you want to do is go to battle with an insurance company that you’ve been making payments to for the last several years.

Amica achieved the highest numerical score across all categories in the J.D. Power 2014 U.S. Household Insurance and Bundling Study. These six categories measure factors like Overall Satisfaction, Price, Policy Offerings, Claims, and other characteristics fundamental to quality homeowners insurance.

Amica also ranked at the top of Consumer Reports’ homeowners insurance ratings. This study measures existing customers’ satisfaction with agent availability, the dollar estimate received when damages occur, and timely payment by the insurer.

In the event that you do need to file a claim, it’s comforting to know you can easily contact your agent, be treated fairly, and get the money you need to make repairs quickly. Ranking exceptionally well in separate studies conducted by two of the most reputable companies is a good indicator that Amica is doing something right.

Additional Protection

In addition to the basic coverage options listed above, the policies of each major company include other types of coverage to complement the basic options outlined above. For example, Allstate also offers optional coverage for identity theft restoration, scheduled personal property, water backup, and more.

Most home policies cover damage from wind and fire, but natural disasters like floods or earthquakes almost always have to be added on as an additional policy option. If you live in areas particularly susceptible to these threats, you should look into the catastrophic coverage options offered by the provider before making a purchase.

Homeowners insurance obviously won’t be of much interest to you if you don’t own a home. If you’re currently renting or making the move soon, you won’t want to miss my next article that discusses the best renters insurance companies and shows you why one is better than the rest.