Evaluating Homeowners Insurance Companies Tips

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What insurance companies are licensed in your state?

Companies Licensed In Your State

Not every homeowner's insurance company is licensed in every state. So just because a friend has a policy through a certain company or there was a commercial on TV that caught your eye, that doesn't mean your choice is made for you. Check with your state's Department of Insurance. Some states will have a list on their Web site while others may not or they may not be very easy to find. If you cannot find the information online, give them a call to see what agencies are licensed to provide insurance where you live.

Now that you have that list, you can start doing your research and home insurance comparisons. There is no point in wasting time evaluating companies that would not be able to provide you with home insurance anyway. Your time can instead be spent productively by focusing on the companies that are viable options for you.

   
Is the company stable?

Looking At Insurance Provider Financial Stability

There are several factors to consider when looking for insurance. The decision can't be made solely on the homeowner's insurance quotes you receive. While those are important, they are small pieces in a larger puzzle. The financial stability of the insurance company is paramount. If they are struggling financially, how can you be confident that they will be there for you in the event you need to file a claim?

You don't want to have to worry about whether or not your homeowner's insurance company will be able to honor your policy if something happens. You want to know without a doubt that you are safe. So before you make your choice, look into the financial stability of companies you are considering. You can obtain this information easily through independent rating agencies.

The last thing you want to get is an “I-O-U” when filing a claim with your insurance provider.

   
Do they offer ways for you to save in the future?

Opportunities to Save?

Ask a prospective homeowner's insurance company you are considering how they show their customer appreciation. Often times a company will offer discounts for valued and loyal customers, meaning you will be eligible for a percentage discount on your policy after a certain number of years.

Even if the discount comes in three or five years, it is worth it to ask. Homeowner's insurance is as much about the future as it is about the present. If they have no such programs or they are not as rewarding as another company's is, tell them. Maybe they can work something out for you. It never hurts to ask.

These types of benefits are great, but they do not have to be deal-breakers. If a provider has the rates and policies you are looking for and you feel comfortable with their customer service, that is more important than a three percent discount five years from now. Discounts are like the cherry on top of the ice cream sundae. They look and taste nice, but the sundae is the most important part.

   
Were they polite when you contacted them?

Customer Service Up To Par?

When you start contacting home insurance companies, over the phone or in person, think of it like a job interview. They want your business. Are they doing everything they can to get it? Are they polite and helpful? Are they willing to take the time to explain things to you until you are comfortable?

The level of customer service you receive in that initial period should make you feel comfortable. If the people you speak with are neither courteous nor knowledgeable, maybe they are not right for you. Even if the rates they offer seem to be in the right range, this choice is about more than dollars and cents.

When you are asking your questions, don't be shy about not understanding something. Ask as many questions as it takes until you know exactly what is happening. If you don't feel they are answering your questions completely, let them know it. Make it clear that you won't be making a decision without being fully informed. They should do everything in their power to provide you with that peace of mind.

   
Did you ask friends and family what insurance they have?

Friends & Family

Talk to your friends and family. Find out who they use for their homeowner's insurance, what types of policies they have and if they have had good experiences with their providers. If you know anyone who has actually had to file a claim with their provider, talk to them and find out how the process went. Were the people they dealt with helpful? Did they make every effort to process the claim and take care of their needs?

If you do not know anyone who has had to file a claim, don't worry. There are other ways to find information like that (Internet, independent rating agencies, etc.) Just get whatever information is readily available to you and you can proceed from there. Remember that you do not have to limit yourself to looking at home insurance companies that people you know use. You can and should look at other providers as well. Just because a neighbor went with one company does not mean that is the right one for you.

   
Are lower rates always better?

Are Lower Rates Always Better?

When making home insurance comparisons most people tend to be drawn immediately to the company that offers lower rates. Why not? This is understandable and there is nothing wrong with it. Just don't make a hasty decision before having all the facts about each provider. That is where you can get into trouble.

Everyone wants cheap home insurance in the financial cost sense. But you do not want “cheap” home insurance in the sense that your coverage is severely limited and does not offer the protection you need. So make sure that the low rates don't blind you to the other things that should be helping to form your decision.

If you look hard enough you should be able to find a company and insurance policy that is in both your price and coverage range. Top homeowner's insurance companies can provide this. Because spending less now is well and good, but not if you have to pay a lot more down the road.

   
Did you look at homeowner's insurance company ratings?

#1 In Customer Satisfaction

When it comes time to compare homeowner's insurance companies, a good place to start is with customer complaints and satisfaction ratings. These can be obtained through companies online like JD Power and Associates or your state's Department of Insurance site. See how other customers rate the service they get from their insurance companies. Remember there is a context for each customer complaint, so one bad review doesn't mean the end of the world, but consistent negative comments and ratings might be hint of what to expect with that particular company.

You want to be comfortable with your home insurance agency. If you ever need to file a claim, you want the people you deal with to be helpful, knowledgeable and professional. Having that piece of mind will make the process of choosing an insurer and interacting with them much easier. You will know that they are working with your best interests in mind. That's where homeowner's insurance company ratings come into play.

   
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