Where to Obtain a Home Insurance Estimate

Home insurance should be a vital part of your financial plans whether or not you own your own home.

If you own your home, you need to protect the financial investment you have placed to secure your future and that of your family.

Even if you do nhomeowners insurance averageot own your home, all of us have invested money and time in furnishings, clothing, and valuables that need to be protected against the vagaries of weather, other people, and the ravages of fire.

In our day when individuals are willing to bring lawsuits over frivolous things to settle wrongs, imagined or real, liability insurance helps protect us against the fear of lawsuits and subsequent assessments of injury.

An estimate for home insurance is an important part of wisely shopping for this costly insurance.

In the insurance industry, estimates are referred to as quotations. Quotations take the existing facts about your residence such as:

  • Amount of coverage desired on the building
  • Construction of the dwelling
  • Amount of liability desired
  • Location
  • Address

These facts are put together into a quotation, which is a proposal to write insurance on the property. Quotations are ordinarily only current for thirty days because rates and circumstances may change.

A wise consumer will acquire quotations from at least three difference insurance companies to obtain a rate spread. Insurance companies’ rates vary according to the rate filings they have placed with the state in which they write insurance.

Use the FREE comparison tool at the top of this page to start searching for insurance policies today!

Where are estimates for insurance available?

As part of sales strategies, insurance companies will provide estimates or quotations freely with the appropriate information. There are three types of markets for insurance:

  • Independent agents – These represent several companies and are able to give several different quotes.
  • Exclusive agents – These agents sell the products of one insurance company.
  • Direct market sales – These products are sold by mail, telephone, or over the Internet

All of these insurance vendors must be licensed by the state in which they write insurance. For information about licensing and complaints, contact the state insurance office’s website.

These websites can be accessed by consulting the website of the National Association of Insurance Commissioners (NAIC) and click on your state.

Choosing Insurance Companies

Begin with consulting the following sources for reliable insurance companies:

  • State insurance department – licensing, complaint ratios, and referrals
  • NAIC website for specific information about insurance companies – financial ratings and complaint ratios
  • Friends, neighbors, and co-workers to determine their recommendations
  • for insurance agencies and companies
  • A.M. Best Rating for financial ratings
  • Standard and Poor’s for ratings

Financial ratings indicate the financial strength of insurance companies that helps you determine if the company can meet its obligations in the event of a catastrophic loss.

Complaint ratios help you determine the strengths and weaknesses of that particular insurance company’s handling of claims and paperwork.

How much insurance is needed?

average homeowners insuranceEstimate the value of your home and its contents. Remember that, even in the event of a total loss, you will not have to replace the land and amenities that go with the property.

You should insure the building and contents for either the actual cash value or the replacement cost of the building and contents. Here is a brief discussion of the differences:

  • Actual Cash Value – the value of the property with wear, tear, and age subtracted
  • Replacement Cost Value – the amount it will take to replace the building and contents with like construction and equal value

There are building cost calculators available on the Internet to help determine the amount it will take to replace the building. Your insurance agent, too, should have access to calculators that will help you determine the value:

Home insurance policies have a scheduled amount of policy limits after the determination of the amount of insurance on the building. These limits are as follows:

  • Dwelling cost – determined by you, depending upon the actual cash value or replacement cost
  • Other structures such as fences, sheds, stand-alone garages – 10% of the dwelling cost
  • Personal property – contents of the home – 50% of the dwelling cost. Note that there is a limit for any one item, so specially schedule valuables over that value
  • Loss of use – 20% of the dwelling cost – This pays for additional living expenses if you need to move out of the home because of any of the covered perils.
  • Liability insurance – chosen by the owner – ordinarily $100,000 to $300,000 depending upon your needs
  • Medical payments – chosen by the owner

Saving Money on Home Insurance

There are a number of ways of saving money on home insurance policies.

To take advantage of these, it is necessary to plan and request the credits in your quotations:

  • Increase the deductible. A deductible indicates the amount of a loss that you are willing to pay to reduce premiums. Be sure you can afford the deductible, but recognize that a home insurance policy is not intended to provide maintenance.
  • Combine your home insurance and your automobile insurance with the same insurance company. This can save you from 5% to 20% on premiums, depending upon the company.
  • Make changes to your home to reduce the possibility of loss – install secure locks, warning systems, and upgrade HVAC systems. Rewire your home more safely.
  • Avoid risks such as trampolines, pools, and certain breeds of dogs.
  • Maintain a good credit rating.
  • Examine quotes from at least three different companies on an annual basis.

Use the estimates you obtain to make rational decisions about insurance.

Remember that a solvent insurance company is more likely to pay claims reasonably than one with an interest in cutting costs sharply.

Examine your policies yearly and read them when they arrive. Every insurance policy has provisions that must be adhered to by both the insurance company and you, the individual insured. You should know both.

Use the FREE quote comparison tool below to start your search today!