Choosing the Right Home Insurance Policy: Your Quick and Easy Guide

If you just bought your dream home, it‘s highly likely that you're also planning on insuring it. However, if it's your first time owning a house, chances are you may be unsure of what to look for when it comes to home insurance or what some call “homeowners insurance.” 

Understandably, choosing the right home insurance policy can be tricky for first-timers, so, the following steps should get your search off to a superb start:

Before purchasing 

If you’re like most people, you’ve likely been working on your credit score just to get approved for a mortgage. This might not be common knowledge, but your credit score can impact how much you'll be paying for your policy. In most cases, the higher your credit score is, the lower you will be paying in terms of premiums. 

The home you'll choose can also impact the cost of your policy. Typically, some of the factors insurers consider when assessing a home's insurability include location, type of construction, fire-protection class, age of the house, and construction costs. 

If purchasing a used home, secure a claims history report from the seller if possible. From there, you can see and anticipate potential issues that might cost you down the road.

Choose your policy 

In addition to your auto and homeowners policy, consider investing in an umbrella policy. In essence, an umbrella policy is a liability insurance policy that comes with high limits of coverage. Umbrella policies work by broadening your coverage and acting as excess over two or more primary policies (watercraft, auto, homeowners, etc.). 

The limits offered by your primary policy won't suffice if you become liable for a significant loss. Consider opting for a high deductible on your property coverage. A higher deductible can dramatically lower your premium since it allows the insurance provider to avoid small claims alongside other associated claims settlement/investigation costs.

Cover all the bases 

As a general rule of thumb, you should not sacrifice protection for a lower price tag. It’s ideal that you insure your home for the replacement cost as opposed to the cost to have it built. 

Also, it would be ideal to look for possible holes in the protection. Is the area where you’re located prone to earthquakes or floods? Typically, these aren’t covered under conventional homeowners insurance plans.

Choose the right provider 

Before signing on the dotted line, consider shopping around for the best provider and plan. It would also be a good idea to obtain a few quotes so you can compare limits, deductibles, premiums, and coverages. 

It also pays to remember that not all homeowners insurance policies have been created equal. Be thorough with your research so you'll be able to cover all the bases. 

It would also be a good idea to take advantage of any discounts that might be available for you. Installing a burglar alarm or storm shutters for example might qualify you for a discount. Some insurance providers also offer discounts for non-smokers, veterans, or those who pay their policy in full rather than monthly.

Make the most of your home insurance policy 

Pick wisely which claims to file. In some instances, property losses can be handled without getting the insurance provider involved. It won't be smart to swap dollars with your insurance provider by insuring losses or expenses you can take care of. This is because in the end, you’ll be paying the amount of the losses plus the expenses of the insurance provider. 

When a loss occurs, make sure you do your due diligence to ensure you are covered accordingly. 

  • Notify your insurer promptly.
  • Ensure you take the necessary steps to protect your property from additional damage.
  • Prepare an inventory of your personal properties that are damaged.
  • Ensure you file proof of loss within 60 days of the insurer's request.

Choosing the right home insurance policy can be easy if you have the proper guidance. Make sure to cover all the bases above and you're a step closer to choosing the best home insurance policy for you.


About the author: Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.