How to Compare Homeowner's Insurance Rate Quotes

As a homeowner, you need homeowner's insurance in order to protect what is probably your largest investment. Also, most lenders require homeowner's insurance before approving the mortgage loan. Since there are many insurance agents and companies on the market, each one providing its own insurance quote, how do you determine which one is the best for you? Here are several tips to help you decide.

Input the same values when obtaining rate quotes. While it may seem obvious that you should use the same parameters when comparing homeowner's insurance rate quotes, it is easy to forget small details. For example, the number of people on the policy is critical because individual credit scores are used to calculate the final insurance premium on your home. Likewise, some insurance companies provide up to $1 million in coverage while some stop at $500,000.

Check if the insurance rate quote provides replacement or actual cash value on your home and belongings. Knowing whether your insurance company will pay to replace your lost home and belongings or just reimburse you for their current and (usually) depreciated value is very important in deciding if the premium is worth the money. It also helps determine if you need additional coverage.

Ask for insurance rates with several deductibles. When collecting insurance rate quotes from several insurers, ask that they provide you with rates based on several different deductibles. In this way, you can decide whether a lower deductible is a good value or if you should take a higher deductible and save the extra money for a future insurance claim.

Check if the insurance quote covers "all risks" or only a few "named perils." Some insurance policies list very specific risks that are covered, while others are more flexible and will usually reimburse you for any type of damage incurred. This is important in areas that are prone to unique natural disasters such as hurricanes and earthquakes, for example.

Are multi-policy discounts available? Some insurance agents and companies offer multi-policy (i.e., umbrella) discounts that can save you a substantial amount of money. If you already have car, boat or life insurance, you may want to "bundle" these policies under one insurer.

How responsive is the insurer to filed claims? Insurance agents and companies differ in their level and quality of customer service following a claim. Do an online search for each insurer and find out how many complaints have been filed against it by disgruntled customers. Also, find out if the agent or company is in good standing with the Better Business Bureau.