How To Shop For Home Insurance Hassle-Free

When you shop for home insurance, the two main factors to consider are coverage and premium. The coverage you elect will detail how and when your insurance will assist you in recovering for claims. The premium you are quoted will determine how much your home insurance costs over a yearly period.

Step 1: Take a Risk Inventory

Assess your risk to know how much you could potentially lose and the key risks you are exposed to. For example, what is the total amount of assets in your home? Are there specific items, such as jewelry or small electronics that could easily be stolen or damaged? Remember that your exposure to liability is also a risk. If you appear to be wealthy, such as having expensive cars or a big house, you are typically more of a target for lawsuits. Accurately assess your risk by determining factors such as total assets, potential natural disasters, potential theft and exposure to liability.

Step 2: Assess Your Ability to Pay Premium and Losses

If you have a large amount of savings, you may be able to pay some losses out of pocket. In this case you can choose a high deductible for a lower monthly premium. On the other hand, you may have a high income but little savings, which means you can opt for a low deductible and higher monthly premium. Know your target range before you begin shopping to give yourself a realistic goal.

Step 3: Ask for Recommendations

Your mortgage company is a great resource for home insurance recommendations. Family and friends may also have advice about which companies are best for customer service and claims. Your auto or vehicle insurance may offer coverage for homeowners. If you have had a good experience with these companies, you may benefit from bundling the coverage for a lower rate.

Step 4: Issue an RFP

Insurance agencies will be happy to do this step for you. They will take the factors you present and also help you with risk assessments. Next, they will issue a professional "request for proposal" (RFP) to a number of companies and seek the best deals for you. However, insurance agencies and brokers do take a commission, usually based on the total premium place. You can sometimes make up this lost income in the savings they will locate for you. It is up to you whether or not to use an insurance brokerage. If you go in alone, though, use a standard RFP. You can find these on the Internet. This will keep the process streamlined and make your quotes easy to read.

Step 5: Review Your Contract Before Signing

If you have located a policy you believe you want to purchase, review it very carefully. Look for words such as "named coverage" which state exactly what types of risk you are protected from. Also watch for exclusions; these are usually listed at the end of the policy and state what types of risks you are not protected from. Ask as many questions as you need to ask. The insurance company or broker should be helpful in explaining your options.

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