Are you covered? Home insurance can reimburse you for a variety of damages, from theft to fire to a natural disaster. A typical standard policy covers your residence and any other buildings on the property--such as a garage--the personal property that you keep there, and your liability for damages that a visitor suffers on your property. Standard policies also often cover additional living expenses if you need to relocate because of an insured loss, as well as the theft of your possessions away from home. Here are five ways you can make sure you choose the right policy for you and make the most of the coverage you have.
1. Know your options. It pays to shop around, so get quotes from a few insurance companies before you make your decision. If you want to know about a company’s record in your area, consider contacting you state insurance department or the National Association of Insurance Commissioners. You can also get more information from consumer guides and local insurance agents.
2. Don’t make assumptions about what’s covered. For example, flood and earthquake coverage aren’t part of most standard policies, so be sure they’re included if you need them. On the other hand, confirm that you aren’t paying for insurance that you don’t need before you commit to a policy (such as flood insurance if you don’t live in a flood zone). Expensive personal property, such as jewelry and computers or other electronics, may require additional “floater” policies. Find out what any policy includes—or doesn’t include—before you sign up.
3. Compare apples to apples. When you’re evaluating prices, consider making a chart that spells out exactly what’s covered under each policy. You may find that the reason that one policy is a little cheaper is because it doesn’t offer as much coverage or the same kinds of coverage as another policy or because it has a higher deductible. You should also look at the maximum amount that each policy will cover, then, consider all the details and determine which one offers the best value for your needs.
4. Consider a higher deductible. The deductible is the amount you must pay to cover damages before your insurance kicks in. The higher the deductible, the lower your monthly insurance premiums will likely be. The risk is that you’ll have to pay more of the costs from your own pocket up front if damages occur. You can lower that risk by taking proactive steps, such as installing storm shutters if you live in a hurricane zone or replacing faulty wiring or aging plumbing, for example, to try to minimize your expenses if a disaster occurs.
5. Ask about discounts. Some insurers offer discounts for safety steps you’ve taken, such as installing an alarm system, smoke alarm or better locks. (When you buy a home, you may be able to get a better deal, too, if it has newer electrical, heating and plumbing systems or even if it’s near a firehouse or fire hydrant.) Retired people may get lower premiums, and your employer or professional or other organization may have programs that offer reduced insurance costs. You may be able to get a good package deal, as well, if you buy both home and auto insurance from one company. Some companies also offer longevity discounts for customers who have been with them for a few years. Be sure to ask which discounts you may qualify for.