Getting House Insurance Quotes

Before you purchase a new house, you should face all the costs of home ownership. If you have been living in rented homes, there are a number of costs that you have not had to pay.

Everyday maintenance on the exterior, modification, and repair of heating, cooling, and electrical systems as needed costs money.

homeowners insurance ratesReal estate taxes, city property taxes, and permits for making changes in the house. Finally, there is house insurance. House insurance in the United States costs, on average, about $1,000 annually.

Prepare yourself for these costs by arranging for a licensed home inspector to examine the house before purchase. This inspector will alert you to necessary repairs that will need to be made, maintenance issues, and problems with the house.

A quick check with the county or state tax collector or title insurance company can tell you about taxes. Utility companies can tell you of previous utility costs. All these expenses are essentially fixed.

Home insurance is one of the expenses that can be negotiated and examined.

Getting insurance quotes from at least three different insurance companies can help you get the best prices from the best insurance companies, but you will need to carefully shop, become familiar with the language of home insurance, and then determine the best price.

Furthermore, after you have purchased the insurance once, you need to be aware that rates and companies change depending upon the individual company’s loss experience, so it is necessary to plan to revisit the process at least once a year to re-figure the insurance.

Be sure to use the FREE comparison quote tool above!

Where To Get Quotes

There are a number of places to obtain quotes from insurance companies. Insurance is sold in the following ways:

  • Direct market sales – over the Internet, by mail, or by telephone
  • Exclusive agents – these are ones that only sell the products of one insurance company
  • Independent agents – representing several companies and able to give quotes for several different companies

To obtain quotes, have the following information available:

  • Type of construction
  • Age of the house
  • Local fire protection
  • Amount of coverage – and deductible

Then call your chosen agent and request quotations that reflect your needs.

How much insurance should you purchase?

The cost of your house is not an indicator of how much insurance you need to purchase. When insuring your home, consider that it is not necessary to insure the land upon which the home is located.

house insurance quotesEven in the event of catastrophe, land cannot be destroyed, so it is not necessary to insure it.

It is best to insure your house for replacement cost rather than actual cash value.

Replacement cost coverage means that, in the event of a loss, the insurance company will replace the house up to the amounts of the policy with like kind and cost.

The other alternative is actual cash value in which a loss is adjusted for age, wear and tear, and condition depending upon the amounts of the policy.

There are a number of ways of determining replacement cost for your house.

Your insurance agent may have ways of determining replacement cost, but you may contact one of the many online sites to figure the value. Some are free, but others have a fee for determining this cost.

Typically, home insurance policies have a somewhat fixed formula for determining coverage for everything except buildings and the liability coverage. This is how the formula works:

  • Building – determined by you
  • Other structures – such as fences, sheds, other buildings – 10% of building coverage
  • Personal property – contents of the dwelling – 50% of building coverage
  • Loss of use – living costs if you have to move from the house – 20% of building coverage
  • Liability coverage – determined by you ($100,000 to $300,000)
  • Medical payments – determined by you ($1,000 to $5,000)

Choosing an Insurance Company

Unfortunately, not all insurance companies are the same. You need to examine them before purchasing insurance from them. Criteria for determining what insurance company to choose:

  • Insurance companies must be licensed in your state – go to the National Association of Insurance Commissioners (NAIC) website to find the URL. States license companies and will have listings of them.
  • Examine the financial status of the insurance companies you choose by contacting NAIC; A.M. Best; or Standard and Poor’s.
  • Complaint ratios to determine the insurance company’s performance at NAIC.

Also, discuss insurance companies with neighbors, co-workers, relatives, and acquaintances about companies.

Perils For Which to Insure a Home

Usually individuals insure their homes for the following perils, or causes of loss:

  • Fire and the results of fire such as smoke, explosion, damaging storms such as hail and lightning, damage from others’ vehicles, and civil unrest
  • Theft from the premises and vandalism to building and contents
  • Trees and other falling objects, but not the cleanup after a fallen tree
  • Weight of ice, snow, and sleet that damages the building
  • Sudden and accidental freezing, rupturing, or overflowing of household systems as well as appliances

Be aware that flood and earthquake insurance is not covered in this policy.

To purchase flood insurance, contact your local agent or go to FloodSmart.gov. Earthquake insurance, too, may be purchased from your local agent.

Saving Money on House Insurance

There are ways of saving money on house insurance. Some of these are the following:

  • Carrying both your house insurance and car insurance with the same company
  • Increasing your deductible to the maximum you can afford. This will increase your savings on house premiums.
  • Maintain a good credit rating to keep maximum possible credits from the insurance company
  • Upgrade heating, plumbing, electrical, and alarm systems to code so you get credits
  • Ask your insurance agent about credits that may be offered by particular companies.

Evaluating Quotations

best homeowners insurance offersMake sure the insurance company and/or agent you have chosen are licensed within the state.

Examine the quotations you have obtained to determine the most advantageous price to start. Then examine the financial condition of the insurance company to make certain that they will be able to pay necessary claims.

Look at the complaint ratios for each company to determine how they do their business on an ordinary basis. Then make your choice to purchase one of the policies.

Keep the information you have obtained for next year when you should do another checkup on insurance premiums. Careful financial planning requires that you examine major purchases on an annual basis.

Use the FREE comparison tool below to start your search.