Shopping for House Insurance

You pay car insurance, health insurance, life insurance, and if you own a house, you have to pay home insurance. Like any other insurance, you have to shop around and spend time researching to find the best insurance and rate for your home. Home insurance – consumer guide can help you narrow down the plethora of options that await you and help make the process a whole lot easier.

Just like any other insurance, home insurance in the United States is bound by a term contract and the payments are called the premiums. Most likely if you have to take out a loan to buy a house, your lender will require you to have home insurance, as protection in case something happens to the house.

There are several different policies when it comes to home insurance, all standardized by the Insurance Services Offices (ISO). However, these policies though standardized, still vary in rate from insurance company to insurance company. Most perils like theft, fire, hail, are included in the basic policy. If you happen to live in an area of high risk for flooding or earthquakes, you will have to take out a supplemental policy.

In addition to the different policies, there are also different coverage classifications. The are six different coverage options, ranging from insuring just the house to covering personal property, to allowing a renter a little protection on their assets. Some common policies include the following:

HO-1, HO-2, and HO-3. These are the basic policies for single-family homes. The HO-1 covers 10 perils and the HO-2 covers 16 perils, while the HO-3 covers everything except specific exclusions.
HO-4. This policy is for renters. It covers 16 perils plus liability; however, it does not cover the dwelling itself.
HO-6. If you own a condominium or a co-op, this is the policy for you. The HO-6 provides coverage for personal property, plus liability on specific coverage for repairs on the condo.

Rates and Fees

It is easy to get caught up in thinking that your payment and the subsequent insurance rate is the only really important things to look at while shopping for home insurance. However, brokerage fees and other charges, along with the amount of the down payment can make a huge difference when comparing loans.

Rates fluctuate as much as the weather, so keep in mind when speaking with insurance companies the time frame of the quote. Plus, home insurance rates change from state to state, with some being a lot more expensive than others.

Getting Started

So you know you need home insurance and you kind of know what sort of policy and coverage you are looking for and how much you can afford to pay, but where to start? There will be a lot of paperwork involved as companies figure out how high-risk you are, along with other factors. Well-known companies such as AIG, All State or State Farm are great places to start, especially if it is your first time shopping for home insurance. Backed by years in the business, they can answer any question you may have. Still, be sure to ask questions on anything and everything, especially if you do not understand it.

Don’t forget to look for ways to save on your home insurance, like if you have smoke detectors and an alarm system. Anything that makes your home more secure will help you save. Finally, keep in mind that the amount you insure your house for is the amount you would receive, should you lose your home and have to replace it.