For many people, their home is their most valuable and treasured possession. It’s not just bricks and mortar, either. Your home also contains your belongings and the people you love. Protecting such an essential part of your life is the smart thing to do, and the way to do this is with a homeowner’s insurance. That starts with being fully aware of the best home insurance reviews out there.
This article is going to give you all the information you need to make an informed decision if you have never bought home insurance before. If you already have some experience, it’s going to help you find the best coverage for your money. We’ll also cover how to make the process of purchasing homeowners’ insurance policies more manageable. Plus, we’ll give you 5 home insurance reviews that you should be aware of before making your choice. Ready to get started?
What is Home Insurance?
Home insurance is a type of property insurance that protects against damages and losses in and to your home. It also provides cover for any accidents that might happen in or on a property.
What the coverage includes varies depending on the homeowners’ insurance provider and the policy. However, generally speaking, you can expect it to cover damage to the interior and exterior, damage or loss of personal possessions, and injuries that occur when on the property.
There is usually a liability limit that controls the level of coverage should something happen.
The standard cover excludes certain things, and these are acts of war or acts of God. Home insurance is not the same as a home warranty or mortgage insurance.
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Is Home Insurance Essential?
Home insurance tends to be an optional expense. If your home is subject to a mortgage loan, your lender may insist you purchase adequate cover though. They do have a vested interest in your property, so it makes perfect sense that they want to be assured any damage is covered.
If your property is part of a condo or homeowner’s association, you may also be required to purchase homeowners’ insurance of at least the primary level. The actual requirements vary depending on the association and the type of cover already in place.
Living in specific locations can make the need for homeowners’ insurance much higher. If, for example, you live in an area that experiences frequent earthquakes or hurricanes. It’s worth pointing out that a standard home insurance policy does not offer earthquake and hurricane coverage. You may have to purchase additional coverage.
Flood insurance is recommended if you live in an area that’s prone to regular flooding. It’s not generally included in a standard policy, which means you have to purchase a separate policy.
Homeowner’s Insurance vs. Renter’s Insurance
Homeowners and renters insurance are similar in almost every way. The reason for them both is to protect your property. They both prevent you from paying the cost of damages and losses out of your pocket. Liability coverage, which comes in case someone is injured on your property, is also covered by both. If you find yourself displaced from your home, both homeowners and renters insurance provides financial assistance.
The difference lies in what the policy covers. Homeowners insurance covers the structure of your home. Renter’s insurance, on the other hand, only covers your possessions. Renters don’t need the actual construction of their home to be covered, because the landlord’s insurance takes care of this.
What Are the Things Covered Under a Standard Home Insurance Policy?
When you start looking for your home insurance, you’ll find specific jargon being used. One example of this is going to be the classifications used in conjunction with the coverage. The classifications are as follows:
Coverage A – Dwellings
This type of coverage includes the structure of your home. If your dwellings are damaged or destroyed, whether by wind, hail, vandalism, or fire, insurance will cover their value. The cost of the land it stands on, however, is not covered under dwelling coverage options. It doesn’t cover earthquake and flood damage, either. This coverage has to be purchased separately and excludes normal wear and tear.
Coverage B – Other Structures
This classification includes other buildings that might be on your property. Garages, sheds, and any other detached buildings are covered, as long as they make up no more than 10% of the dwelling coverage. If the other structures amount to more than that you need to speak with the insurance company’s customer service representative to discuss additional coverage.
Coverage C – Personal Property
The contents of your home are considered to be your personal property. Furniture, clothing, electronics, appliances, art, and other personal belongings are included in this category. Before taking out any home insurance, it’s advisable to do an inventory so you can be sure you’ve got the right level of coverage. When you write it all down, you might be surprised how much you own. There may be limits on expensive items, for example, jewelry. For high-value items, you might need additional coverage.
Coverage D – Loss of Use
If you find yourself displaced from your home, there may be costs that you need to be covered. Hotel and rental expenses are a couple of examples. The classification “loss of use” covers these living expenses.
Liability
This section of homeowners’ insurance policies covers homeowners against a lawsuit for property damage or bodily injury that might be caused to other people or their property. It even includes the damage caused by your pets. This section of your policy is used to pay for the cost of defending yourself and any damages awarded. There is a limit referred to in the policy documentation. The limit usually starts at around $100,000. If you think you might need a higher limit, then you can discuss the matter with your insurance companies’ customer service agent.
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Medical Payments
Should anyone be injured in your home, this section covers any medical bills that you have to pay. A liability claim doesn’t necessarily have to be filed against you. Instead, the injured party submits any medical bills to your insurer.
If you want to know more about different types of home insurance coverage, the Insurance Information Institute is an excellent source of information.
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What Does a Standard Homeowner’s Insurance Policy Not Cover?
As well as knowing what your claim covers, it’s also useful to know the exclusions to a standard home insurance policy. In an ideal world, it would be great if your home insurance covered every eventuality. Unfortunately, it doesn’t work that way. It’s better to know the limits of your policy before you ever need to file a claim. Certain situations that are very rarely covered by your home insurance include:
Flooding
Any weather-related flooding is not covered by home insurance. Exclusive coverage is possible, or water damage endorsements can be offered as part of the insurance. However, it tends to cover accidental flooding, such as that caused by a burst pipe. If there is heavy rainfall, or a river has overflowed and caused water damage, the coverage will not include these accidents. If you live in an area that’s prone to regular flooding, the National Flood Insurance Program offers additional protection.
Earth’s Movement
A standard home insurance policy does not cover Earth’s movement – earthquakes, landslides, and sinkholes. There are a few companies that offer this protection as part of their insurance service; however, it’s not usual. On top of the standard coverage, you can purchase special endorsements.
Wind Damage
If you live in an area that’s prone to hurricanes, you’ll need to purchase additional endorsements.
Simultaneous Events
If damage to your property occurs because of two simultaneous events, for example, wind and flood, you might be covered for one but not the other.
Lack of Maintenance
As a homeowner, you’re responsible for keeping your home in good working order. This means both routine and preventative work is sometimes required. Because of these responsibilities, there are specific issues not included in your standard coverage. These include mold, termites, ordinance changes, sewer backups, and burst pipes.
Nuclear Accidents
If you live near a nuclear power plant, any damage caused by accidents is not covered. Nuclear power companies do, however, pay into an insurance company pool that can be used to cover the cost of any damage.
Acts of War
Hopefully, the chances of a war in the US are pretty low. Domestic terror attacks, on the other hand, are a legitimate threat. Unfortunately, your homeowners’ insurance does not cover such damages.
Certain Breeds of Dogs
It’s already been mentioned that bodily injuries caused by your pet, together with any medical costs, are often covered. If, however, your dog is a breed that has a reputation for being aggressive, the cost of this coverage can be a little higher. It’s also possible that it might not be covered at all. To ensure you have the coverage you need, always check with insurance providers.
Different Types of Home Insurance
There is no one-size-fits-all home insurance policy, which is why they come in a variety of shapes and sizes (which is why it’s crucial to know your home insurance reviews). It’s crucial to get familiar with all the different levels of coverage and policies available to choose from. If you understand the differences, you’re better able to protect your home and your family.
Replacement Cost Policy
This is the most popular type of policy, and it’s one in which insurance companies pay the full replacement cost or repair. There will, however, be deductibles that have to be paid by you. Any replacements paid for must be of a similar kind and quality to the item being replaced. You can’t expect insurance companies to pay for a replacement plasma, HD, surround sound, theater smart TV when the TV that was damaged is just an average make and model. The policy will not take into consideration the age or any depreciation in the value of the damaged item.
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Actual Cash Value Policy
This type of policy takes into account the depreciated value of your personal belongings or home. Any costs paid by insurance companies have the deductible and depreciation taken out.
Open Peril Policy
This is a policy that provides coverage for all risks, except those expressly excluded. These exclusions might include replacing an old roof, rotted gutters or worn paint. Flooding and earthquakes may also be excluded.
Named Peril Policy
This type of policy explicitly lists the perils that are covered. Vandalism, fire, hail, wind, and theft are just a few examples of the risks that the plan includes. If there is a peril you want to add, you may need to request additional coverage.
Home Insurance Coverage Categories
Home insurance coverage can be broken down as follows:
HO-1
A basic policy with limited coverage. It only covers ten named perils, for example, fire/smoke, explosions, hail, windstorms, lightning, theft, riots, volcanic eruption, and damage from vehicles.
HO-2
Provides coverage for 16 named perils. You can include personal liability and personal belongings in the service.
HO-3
Also known as a “separate form policy,” this is the most common type. The cost of this type of policy is reasonable, and most natural disasters are covered. Any exclusions are correctly named. The plan includes liability, other structures, and dwelling coverage.
HO-4
This type of insurance is aimed at the renters’ market. It covers 16 named perils. You can include only personal belongings, and most policies include liability coverage.
HO-5
This is more comprehensive than HO-3 and is an open policy. Damage from earthquakes, floods, pests, mold, war, and water damage can be included. Not all homeowners insurance companies offer this option, and not every home is going to be eligible.
HO-6
This is insurance specifically for condo owners and generally offers the same protection as HO-3 insurance. The only difference is that the dwelling is usually not covered.
HO-7
Very similar to HO-3, but designed for mobile homeowners.
HO-8
Another type that’s similar to HO-3, but in this case, it’s designed for owners of older or historic homes.
The Factors That Determine the Cost of Your Home Insurance
How much you have to pay for your home insurance service is one of the most important considerations. Start by comparing home insurance reviews. Of course, you want to spend as little as possible, but you also want to be sure your coverage is the best. How much you pay for your home insurance service is determined by several different factors. Many of these factors are out of your control, but there are some you can control.
The most common factors include:
The Age of Your Home and Its Location
This is the most obvious factor and the main one you have no control over. The older your home, the higher the risk of problems with the wiring, plumbing, or the HVAC system. With a new home, this type of problem is less frequent.
With regards to the location, there is an average annual premium; however, on a more local level, insurance premiums can vary considerably. For example, in Florida, the average cost is almost $2,000. In Oregon, on the other hand, it’s nearly a quarter of the price.
The Number of Claims You Make
If you make a lot of claims, the cost of your insurance is going to rise.
Your Credit Score
If your credit score is good – for example, 700 or more – your rate will be lower than if you have a fair or bad credit score. The reason for this is that research undertaken by insurers shows you’re more likely to file a claim if you have a bad credit score.
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Deductible
The deductible is the amount of money you have to pay out of pocket before insurance companies will pay for a claim. You can choose the amount; however, it has to be one that you’re comfortable with. If, for example, you want a $500 deductible and file a claim for $5,000, your insurance company will pay $4,500 for your request.
There are two types of deductibles. One is a dollar amount, and the other is percentage-based.
Coverage Amount
How much coverage you choose has an impact on the cost of your insurance.
You can control some of the factors mentioned, while one, in particular, is out of your hands. Here are some tips to help you keep your insurance premiums as low as possible.
How to Keep Costs Low While Maximizing Your Protection
Here are some tips to help you keep your premiums low, without jeopardizing your coverage.
Reduce the Number of Claims You Make
Before you file a claim, consider the effect it’s going to have on your future premiums. The more claims you make, the higher your premium is going to be. Make too many – for example, more than a few claims within a few years – and you’ll be considered high risk. With this kind of label, you can expect to pay 20% more every year for the service.
Look After Your Credit Score
It’s not common practice, but in some states, insurers may take into account your credit score when assessing how much of a risk you are and what you’ll have to pay. Insurers have conducted research and found that customers with a high credit score file fewer claims. Work on your credit score, and you might make some savings and enjoy lower rates.
Raise Deductibles
If you raise the level at which your insurance kicks in, you’ll benefit from a lower premium. Raise it to $1,000, and you could save up to 25%. You do, however, have to weigh this decision up very carefully. Raising your deductible too high might mean you can’t afford to pay for a replacement or repair if something goes wrong.
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Limit Your Liabilities and Maximize Opportunities for
Specific home improvements or upgrades to your home’s security can reduce your premiums. It’s not automatic, and you have to let your insurer know. While you’re still in the planning stage, contact your insurance advisor and check whether any discounts are available. Examples might include carbon monoxide and smoke detectors, deadbolts, and a home security system. Installing storm shutters and strengthening windows can also help reduce the size of your premiums.
Don’t get too carried away, though, because certain things can increase the cost of your insurance. A swimming pool, trampolines, and a dangerous dog breed joining the family are going to bump up your premiums big time.
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Bundling Insurance Policies Together
While it pays to shop around and check out home insurance reviews, it also pays to ask your current insurer whether there are any bundling or multiple policies you can take advantage of. Combine your home insurance with your car insurance and life insurance, and you could save a large amount of money. Not only that, but it also makes the handling of your claims and communications more consistent.
5 Home Insurance Reviews to Know
We’ve already mentioned how important it is to check all your options, but with so many home insurance companies to choose from, it can be a challenge to know where to start. To help you out, we’ve narrowed down the insurance options. Here are our top 5 home insurance reviews.
Amica
Amica has earned itself an excellent reputation for customer satisfaction amongst home insurance reviewers. It manages to score big when it comes to price, overall customer satisfaction, billing, payment, interaction, claims, and policy offerings. Policies issued by Amica can be tailored to suit your specific needs.
They also offer discounts for customers who want to bundle life insurance and car insurance with their home insurance cover. Amica’s financial strength rating comes in at an A+. It also boasts a 95% retention rate. Other benefits include:
- A wealth of discounts to take advantage of, including a paperless bill discount that means you don’t have to mail a check to pay your premiums every month. Other cuts involve owning or installing sprinklers, fire alarms, and extinguishers.
- Dividends policy – This refers to the possibility of receiving between 5% and 20% of your annual premium back if the company does well.
- Excellent customer service.
- 15% saving if you insure your car and your home.
- Contractor Connection is a service that helps the customer find licensed contractors for home repairs.
State Farm
This is a national insurance company that not only offers home insurance but auto insurance and life insurance as well. Discounts can be enjoyed in individual states when you bundle policies together. Several other discounts are also available, and policies can be tailored to meet individual customer needs. State Farm has also received excellent ratings within the industry for customer satisfaction and its financial strength rating. Other benefits include:
- Comprehensive online quote system.
- 360Value Tool that helps with the calculating of estimated replacement costs.
- A robust financial strength rating means it’s able to pay its claims.
- Price breaks if your home has fire extinguishers, sprinklers, and alarms.
- Offers renters insurance, condo unit owners’ insurance, and flood insurance
Farmers
Farmers offer excellent value for the money with their home insurance package. There are three levels of coverage: standard, enhanced, and premier. The standard homeowners’ policy is designed with families in mind, while the enhanced policy includes higher limits of coverage and some extra features. If your budget allows, the premier policy consists of the most upper coverage limits for personal property. Other benefits include:
- Special discounts if you remain claim-free.
- For each year your policy is in force, you can receive $50 toward your deductible.
- Stay claim-free for five years in a row, and you benefit from a “claim forgiveness” reward.
- Discounts for bundling your car insurance with your home insurance
The Hartford
Environmentally conscious homeowners might be interested in this company because it offers green rebuilding benefits. Its unique endorsement for green rebuilding means your policy limits increase up to 10% if you use “green” materials or processes for repairs and rebuilds. Another tick in its box is the official endorsement received from the American Association of Retired Persons. Bundle your home insurance with your auto insurance, and you qualify for some great benefits. Other benefits include:
- A special discount for retirees and those who work less than 24 hours per week.
- Discounts for installing home security devices.
Allstate
Allstate does more than provide the customer with home insurance. It also seeks to educate the customer by providing a library that’s packed full of valuable resources. There are articles, videos, infographics, and quizzes. One particularly exciting tool you get access to is the Common and Costly Claims tool. Type in your ZIP code, and you’ll get a list of the most common claims in your area, together with how much the claims were for. You can also use the GoodHome home report tool which provides you with potential risks and local hazard data. You also get some handy tips on keeping yourself and your home safe.
Other benefits include:
- A large number of additional endorsements available, including coverage for expensive sports equipment, musical instruments, and garden landscaping.
- More discounts than many other companies, including those for installing smoke alarms, deadbolt locks, and fire extinguishers.
- 24/7 claims service.
- Access to an online quote tool.
Tips on Finding the Right Home Insurance for You
We’ve given you five homeowners insurance companies that offer excellent services; however, there are many more good home insurance reviews out there. If you want to find the right insurance, there are specific steps you have to take.
Create an Inventory of Your Possessions
Don’t wait until something happens to worry about what is in your home. Start today by cataloging all your belongings and taking photographs or creating a video. Remember to include those inside and outside your home. You’ll be able to get much more out of any claim you file if you’re ready to establish and prove the features of your home. This also includes the number of your possessions and their quality.
Carefully Calculate Reconstruction Costs
If something should happen to your home, you need to be sure you’ve got the right amount of coverage. If you’ve taken out home insurance (after checking home insurance reviews) because your mortgage lender required it, you may have chosen coverage equal to the value of your home. Rebuilding your home could cost significantly more than this minimum figure. The cost of building materials increases over time. Labor charges also increase. Building codes may have changed, and you may be forced to include new and more expensive features than before. All of these things can increase the cost of rebuilding. It is therefore vital that you make your calculations carefully, taking all these factors into account. Make sure your coverage is enough.
Make Allowances for Your Location
Throughout the United States, there are areas more prone to severe storms and flooding. If you live in one of these areas, always look for insurance companies that can offer specific endorsements.
Collect Sufficient Quotes
This step might take some time, but it’s time well spent. Call several homeowners’ insurance companies and ask for a quote. It always pays to compare homeowners’ insurance companies’ coverage and rates. It is possible to obtain quotes online, and doing it this way makes it much easier to compare quotes from several carriers at once. While this gives you a good idea of prices, you must always speak to homeowners’ insurance providers directly. They might be able to provide you with discounts that you cannot find online. A quote you obtain over the telephone is also going to be more accurate.
Tips for Filing a Claim
Hopefully, you’ll never have to, but it does pay to be prepared. If you know what to do when you want to file a claim, you’ll be more confident throughout the process. Being the victim of a burglary, a severe storm, or a fire in your home is stressful enough without the worry of struggling through the claims process.
Should You or Shouldn’t You File a Claim?
To answer this question, you need to weigh up the cost of claiming against the cost of repairs or replacement. Always make sure your claim is worthwhile because further down the line, your premiums are going to increase. If, for example, the damage is only a little more than the deductible, it might be better to pay the full cost yourself.
Keep a Record of Everything
Your claims process will be smoother if you’ve already got an inventory of your belongings or the condition of your property. If your home is burgled, you can refer to this list when determining what’s missing or damaged. Keep receipts of all your purchases, both a paper and a digital copy.
Don’t Delay Filing a Claim
After weighing up the pros and cons of making a claim, call your insurance company immediately if you’re going to file a claim. It is your responsibility to present promptly. For the claim to be processed efficiently, you need to be able to answer all questions and cooperate fully. You may be required to produce a copy of the police report, for example, if your home was burgled. It also pays to keep a record of the steps you take regarding your claim. Record communications, when and what you talked about and with whom.
If you need any advice about making a claim, you can contact your state’s department of insurance.
Don’t Be Tempted to Make Repairs Yourself
You may be called on to make some temporary repairs, for example, if the roof is severely damaged. Don’t, however, be tempted to put your DIY hat on and make permanent repairs. It’s also essential you don’t discard any damaged items before the insurance adjuster has had a chance to look at the damage. Keep the receipts for any temporary repairs you do make because your insurance company may cover these expenses.
Always Get a Second Opinion
If your home is damaged, you’ll need to hire a contractor to make the repairs. Contact at least two contractors because prices can differ significantly. In some instances, you may be able to choose your contractor, or you may also be forced to use one recommended by your insurance carrier.
Be Prepared for an Inspection
Part of the claims process will be an inspection by the claim’s adjuster. This person will investigate the circumstances of the damage and decide how much insurance companies should pay.
Don’t Accept an Offer If You’re Not Happy
Proving your home or personal property has been damaged by a covered peril is your responsibility. If you’re sure you’ve provided enough proof but aren’t happy with your settlement, you do have some options. You don’t necessarily have to accept the first offer you’re given. Your state’s insurance department will be able to help you resolve the issue. You’re also entitled to hire a public adjuster for a second opinion.
Buying home insurance is vital if you want to protect your home and anyone who visits. Your home is one of the most significant investments you’ll make during your lifetime, and you must take the right steps to keep it safe.
You now have all the information you need to help you make an informed decision about which home insurance provider to choose. We’d love to hear how it worked for you, and our readers always benefit from personal experiences.
Please take a few moments to leave some helpful comments, maybe make a recommendation or two or share some useful tips.
