Homeowners insurance policy is to protect you when a disaster strikes. But in most cases your insurer might not live up to your expectations, especially if you have a large loss claim according to a industry survey of 10,334 subscribers who filed claims here in Michigan in the last few years.
According to this survey the greater the damage, the higher the likelihood that there will be a disagreement over the value of the damage and the fight with your insurance company. For claims less than $30,000, only five percent of respondents reported disagreements with their insurer over the amount of a claim payment. But when damage was valued at $30,000 or more, 12 percent disagreed with their insurer’s assessment of what was due and about three percent of those people also reported that their insurer delayed paying their claims. That was triple the rate for those with losses below $30,000.
“The best test of an insurer is how well it handles claims. Some major insurers provided significantly better satisfaction when it comes to handling claims than others.”
If you’ve been misled by an insurance agent about policy wording, contact a lawyer who specializes in insurance law or you can contact a licensed Public Adjuster. To Find a Public Adjuster near you here in Michigan go to www.publicadjusterslocal.com. For a complete list on the industries best and worst insurance companies please visit www.badfaithinsurance.org. This website is packed with Insurance Industry Related Judicial Corruption.
1. Shop Your Coverage Around
To find a policy that fits your needs, consider getting quotes from a handful of home insurance companies, and assess their coverages, limits, and deductibles.
Make sure you aren’t sacrificing protection for bare-minimum price either. And since you’re probably going to be communicating with your insurer during stressful moments, consider picking a company that is known for quality customer service and 24/7 support.
2. Look For Company Ratings
Always look at ratings. Their rating analysis involves comparing the business to other businesses, and evaluating them against industry standards. Put simply, it’s an assessment of a company’s ability to meet its obligations to customers (such as paying claims), which can help provide peace of mind when picking homeowners insurance.
3. Location Of Your Property
The location of your property could impact how much you pay for home insurance. For example, if the house is in a hamlet with volunteer firefighters, or the closest fire station is more than 5 miles away, rates may start to hike up. Premiums could also be higher if the house is in a geographical location that is vulnerable to natural disasters like wildfires or tornadoes.
Other regional factors that could affect insurance rates include crime rate and general building costs in the area.
4. Look For Insurance Discounts
Most insurance companies offer homeowners insurance discounts for behavior that mitigates risks, so take advantage of them. From storm shutter installation and smoke detectors, to burglar alarms and water safety systems, you may be able to save some extra cash on your home insurance premium.
Some homeowners insurance companies even offer discounts for simply being a new home buyer. Also, improving your credit score could increase your chances of getting a better rate. The higher your credit score, the lower your perceived risk may be.
5. Search The Internet For The Best Price
Do your do homework by searching the internet for the best insurance companies to buy coverage from.
In addition, there are some insurance companies born and raised online that offer a convenient and affordable way to buy and manage your policy.
6. Know How Much You Home Is Worth
Remember, you’re going to want your house insured for its replacement cost, not its market value. While the market value denotes the amount a buyer pays for the home, the replacement cost concerns the expenses needed to repair or rebuild the entire home to pre loss condition.
Keep in mind the costs that may be required to transport the materials to the site, as well as other factors like inflation.
7. Choose A Deductible That Works For You
As you start to build your policy, you can finally set your homeowners insurance deductibles. The deductible is how much you’d pay out of pocket on a claim.
For instance, choosing a higher deductible could help you lower your monthly premium — but it would mean more money coming out your wallet before your insurance company pays out.
On the flipside, a lower deductible means you’d pay less out of pocket after a claim — but your homeowners rates may be higher each month. There are certainly pros and cons for both cases, and ultimately it comes down to your financial security and personal circumstances.
8. Know Your Property Inside & Out
If you have recently bought a home, make sure to get a claims history report from the seller. This report details any previous damage to the home, such as fires, flooding, and other incidents. It can clue you in on any of the home’s frailties that could increase homeowners insurance rates — or, worse, make it difficult to even get insurance.
The Comprehensive Loss Underwriting Exchange is the largest database used by the insurance industry, providing a history of damages to a home that resulted in a claim being filed. The disclosure outlines the date, type, and amount paid for the claim, as well as other helpful information.
Because factors like the age of the electrical system, plumbing, and other components within the home could impact premiums, try to gather as much information as you can to gauge potential issues. Bear in mind that newer homes are usually in better condition than older homes, and could, therefore, be cheaper to insure in some cases.
9. Be Truthful On What You Put In Your Home
When getting your quote and selecting home insurance coverages, honesty is critical. Getting the proper information helps your insurance company provide more reliable protection.
For example, if you plan on upgrading your kitchen (check out that new backsplash!), the value of the home is likely to increase, and your coverage needs to reflect that for your protection. Likewise, if you plan on having a home office, you want to make sure you have the proper liability coverage just in case a client slips on that vinegar floor solution you forgot to towel dry.
Not only could providing incorrect information lead to an inaccurate quote, but the insurer may end up cancelling your policy.
10. Understand Your Coverage Rights
Homeowners not understanding their coverage is a more common issue than one might think. And in a way, it’s understandable. A standard homeowners insurance policy is an intricate piece of literature, outlining the nuances of what is and isn’t covered — it’s also not a particularly riveting read.
Nonetheless, your policy is important. So, if you’re in doubt about anything, speak with your insurer and ask them to explain anything you don’t understand.