Evaluating Home Insurance Companies

When you’re looking at home insurance companies, be aware that there are lots of insurers to choose from – and they don’t all offer the same rates or provide the same level of service.

How To Evaluate Insurer

To evaluate your present insurer or a prospective new one, be sure to understand the policies that the homeowners insurance companies are offering and get answers to these questions:

1. Is the insurer reputable?
   Check with your state's department of insurance to make sure that the homeowner insurance companies you're evaluating has a good reputation in the industry, with good customer service and prompt claims payments. This information is also available from major rating agencies such as Standard & Poor's, Moody's and A.M. Best.

2. Does the insurer cover damage for standard perils and liabilities?
   A standard home insurance policy provides coverage for damage to your home caused by theft, fire, lightning, smoke, frozen pipes, ice and snow. It should also provide coverage for liability claims, medical payments to third parties and legal costs if a lawsuit is brought against you. Don’t deal with home insurance companies that don’t offer these standard types of coverage.

3. Does the insurer offer discounts on premiums?
   If you have a home security system (e.g., fire, burglar or emergency), let your home insurance company know. Most reputable carriers offer discounts for such safety features. You may also qualify for a lower insurance premium if you live near a fire department or fire hydrant, own a newer home or a home built of fire-resistant materials, or get your auto insurance from the same company.

4. Do I understand what I’m buying?
   Read the policy carefully before signing on the dotted line. It should tell you:

• Who and what is covered
• What coverage exclusions and limitations apply
• When coverage begins and ends
• How much coverage is provided
• How much you'll pay for coverage
• How you report a loss or file a claim.

Communication is key when buying homeowners insurance. If there are any questions you have at any time, make sure your current or prospective home insurance company gives you the answers you need and fully explains any terms that are unclear to you.