In addition to providing a roof over you and your family's head, chances are your house is your most valuable investment and asset. Because of the importance of your home, it's vital that you carefully select the homeowner's insurance policy that's best for you.
So when shopping for that policy, or upgrading an existing one, here are some wise steps to take:
1. Collect All Personal Information Needed to Get a Quote
This includes your address and social security number. It also includes safety specifics, such as the nearest hydrant, fire station, central alarm information, etc. You also need to know the construction of your home including date and materials used, as well as claims history for the past five years, if available. In addition, you need to have with you the current policy limits and deductibles.
2. Consult With Friends, Neighbors and Family Members
Find out who they use for their homeowners insurance and if they are satisfied with their coverage. People are very quick to share horror stories and/or successes regarding their insurance company. This can save you valuable time in your search.
3. Decide If You Want to Use an Agent, Direct Writer or the Internet.
This is an important determinant in the amount of time you will spend shopping for your policy. Many people already have an excellent relationship with an agent and may decide to go that route. Keep in mind that the extra work done by an agent may come with a somewhat higher price.
However, you also have the ability to ask as many questions as you like in order to really understand your coverage. The Internet may be faster initially in gathering quotes for comparison, but may pose other issues down the line (see step 6). Direct writers can offer very competitive rates.
4. Know the Limits of Coverage, and Deductibles.
You can always request quotes for multiple options. But it's good to have an idea of what you want beforehand.
5. Set Aside Time to Contact Agents, Companies or Web sites
A good plan of action will help cut down on the amount of time involved
6. Take Good Notes
You will need to know who to contact in order to select a particular policy. You may want to create a small worksheet to track your different quotes and coverage. This can help you ensure you are making "apples-to-apples" comparisons among your choices of policy.
7. Narrow Your List Down. Delve Deeper Into the Remaining Choices. Specifically check:
- Each company's financial strength rating as assigned by the major credit rating agencies, Standard & Poor's, Moody's, A.M. Best and TheStreet.com Ratings.
- Contact your state's department of insurance to see if they can provide you with any information on the companies' history of consumer complaints or anything else that may help you in your decision-making process. For help in contacting your state insurance department, try this link.
- Conduct a quick search on the Internet to glean any other valuable information pertaining to the companies in question.
- Ask each company on your list if they offer "package" or discounted rate if you also insure your automobiles with the same company.
8. Select a Company. Submit a Purchase Application
If the paperwork comes back with a premium quote that differs significantly from what you were initially quoted, don't hesitate to move on to your second choice of company.
Peter Brink is a senior financial analyst for TheStreet.com Ratings. In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
Previous to joining TSC, Brink was an executive underwriter for The Hartford where he underwrote professional liability products with a concentration on the financial services sector. Prior to The Hartford, he was an assistant vice president at ACE Capital Re Inc. where he promoted ACE reinsurance products to the domestic U.S. Life Insurance Sector. His analytical skills were honed through prior analytical positions held at Standard & Poor's where he focused on the Insurance Sector. He has a bachelor's degree in banking and finance from Hofstra University.