If you own a home, insurance is a must. Homeowners insurance protects your property and house from many types of accidental damage including weather and theft. A majority of mortgage holders require that you get homeowners insurance to protect their investment from destruction prior to payment. However, you should insure your property even if you aren’t required to. The right insurance isn’t necessarily the most expensive; learn how to compare and find the best policy for you.
Check Financial Strength
The insurer’s financial strength is its most important quality. Don’t be fooled by low premiums, you may end up paying for the lack of stability. Without financial strength, insurers may not be able to withstand financial distress and may run out of money. If the insurer has serious financial problems, it runs a chance of closing without paying out claims. This defeats the purpose of having homeowner’s insurance in the first place. Companies like USAA or Progressive, which have a financial strength rating of more than four stars out of five, are highly likely to pay out quickly should you need to file a claim.
Consider the Environment
Some home insurance companies won’t cover common natural disasters in the area, which requires you to purchase supplemental insurance or pay higher premiums for coverage. For example, Progressive charges higher premiums if you live in an area prone to particular natural disasters, such as tornadoes, fires or earthquakes. According to the J.D. Power and Associates Property Claims Satisfaction Study, Amica provided the best coverage after Hurricane Sandy hit the East Coast in late 2012. However, Amica customers saw a 20 percent premium increase after the hurricane.
Choose Excellent Customer Service
No matter how great an insurance company’s policies are on paper, if customer service is poor or non-existent, that insurer may not meet your needs. For example, an insurance company that keeps customers on hold for an average of 30 minutes or whose associates are curt when taking claims may cause added frustration when making a claim. Good customer service is important for reducing stress and getting your claim handled fairly and competently after a loss.
Compare your home insurance options below:
About the ratings: The Smart Rating is a weighted average of the Value Rating, Customer Service Rating, Financial Strength Rating, J.D. Power Overall Rating, Contractor Rating, and Insure.com Rating.