What's a good routine for researching and purchasing house insurance?
August 17, 2016 11:06 AM Subscribe
I've been buying house insurance for over a decade. I don't have a work flow or methodology for getting this done really correctly. What work flow, tasks, research, sites and so forth should I use to get a quality result?
Over my house owning history, my strategy of late has been to go with a company who has local offices so there's a warm body in my city I can talk to. I recently read how this same company was sued by Texas for premium overcharges. At the same time, I did a quote by a company connected to a local big box retailer with a price that is substantially lower than what I am paying now.
The question for me is not 'is x company a good deal' but rather what process steps should I follow to get the most rational and cost effective coverage for my situation?
This is a once a year process that when I come up on it, I end up procrastinating because I don't have the processes in place that, if followed, would end up at a clear decision.
Some aspects of that work flow would be how to assess my current insurance needs effectively, then how to shop for insurance with effective tools that let me choose rationally among the various players in this market.
Over my house owning history, my strategy of late has been to go with a company who has local offices so there's a warm body in my city I can talk to. I recently read how this same company was sued by Texas for premium overcharges. At the same time, I did a quote by a company connected to a local big box retailer with a price that is substantially lower than what I am paying now.
The question for me is not 'is x company a good deal' but rather what process steps should I follow to get the most rational and cost effective coverage for my situation?
This is a once a year process that when I come up on it, I end up procrastinating because I don't have the processes in place that, if followed, would end up at a clear decision.
Some aspects of that work flow would be how to assess my current insurance needs effectively, then how to shop for insurance with effective tools that let me choose rationally among the various players in this market.
Best answer: My view is that all insurance companies are great at taking your money. Where it makes a difference is when you make a claim! So I pay more attention to things like the Consumer Reports ranking (paywall) than my personal experience with a company.
You want to come up with a baseline coverage, so that you're comparing apples to apples. Not everything will line up exactly between companies, but you don't want to be comparing policies that are giving vastly different amounts of coverage. You want enough coverage that you could rebuild and replace your stuff, right? So get a rough idea of construction costs in your area for the dwelling coverage, think about your personal property, etc. A lot of companies offer very different coverage by default. Some do full replacement cost, others give you only the current fair market value, which, in the case of used furniture and clothes, is a lot less. If you're in a situation where you have a positive net worth (lucky you!), then you need to look more closely at the liability limits and make sure you have coverage for that in the event, say, an uninsured handyman breaks their neck and sues you.
Choosing the deductible can take some thought. My feeling is that you want $500 at a minimum. The fact is that insurance companies track claims, and you just don't want to be making claims every time something trivial happens like a busted window or a small leak. I have a $1000 deductible, which reduces the cost further, though obviously you would need access to $1000 in the event of a major incident.
Once I know what coverage I want I just go to the sites of the three top CR-recommended insurers. Some of them make you go with an agent. We have SafeCo, they were much cheaper than the others I found, highly rated, and interestingly they have an agent in my town, though I've never spoken with them. For what it's worth, I was satisfied with the way they handled our claim for wind damage to our roof.
posted by wnissen at 11:26 AM on August 17, 2016 [2 favorites]
You want to come up with a baseline coverage, so that you're comparing apples to apples. Not everything will line up exactly between companies, but you don't want to be comparing policies that are giving vastly different amounts of coverage. You want enough coverage that you could rebuild and replace your stuff, right? So get a rough idea of construction costs in your area for the dwelling coverage, think about your personal property, etc. A lot of companies offer very different coverage by default. Some do full replacement cost, others give you only the current fair market value, which, in the case of used furniture and clothes, is a lot less. If you're in a situation where you have a positive net worth (lucky you!), then you need to look more closely at the liability limits and make sure you have coverage for that in the event, say, an uninsured handyman breaks their neck and sues you.
Choosing the deductible can take some thought. My feeling is that you want $500 at a minimum. The fact is that insurance companies track claims, and you just don't want to be making claims every time something trivial happens like a busted window or a small leak. I have a $1000 deductible, which reduces the cost further, though obviously you would need access to $1000 in the event of a major incident.
Once I know what coverage I want I just go to the sites of the three top CR-recommended insurers. Some of them make you go with an agent. We have SafeCo, they were much cheaper than the others I found, highly rated, and interestingly they have an agent in my town, though I've never spoken with them. For what it's worth, I was satisfied with the way they handled our claim for wind damage to our roof.
posted by wnissen at 11:26 AM on August 17, 2016 [2 favorites]
You will save a lot of money by insuring both house and cars with the same company. I've owned 3 houses since 1991. I have never filed a home owners claim. I think any of the big name generally well known insurance companies are going to be about the same. Just make sure you understand the details about water damage, as that is one place many people get confused.
posted by COD at 1:55 PM on August 17, 2016
posted by COD at 1:55 PM on August 17, 2016
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posted by lizbunny at 11:15 AM on August 17, 2016