How to Find a Great Homeowners Insurance Company

Purchasing a home is a major investment and protecting it with homeowners insurance is an absolute must. However, there are differences in insurance companies and just like every other consumer product, some insurers will be a better fit for your needs than others. Finding the right insurance company can take some time and research so we thought it might be a good idea to have a look at how to find a great homeowners insurance company. 

Tips for choosing the best home insurance company

There are dozens of insurance companies to choose from in most locations, so it is always a good idea to compare your various options to find the best insurer for your needs. You should consider your location, ratings and rankings of insurers as well as the cost of coverage. Here are a few factors to consider when shopping for coverage:

Your location

Homeowner insurance rates are impacted by the location of your home. Rates will not only vary by state but also the city you live in as well as your zip code. If you live near water or are in a state that experiences lots of weather related events you will most likely pay more for coverage. Here are just a few factors that can affect insurance rates:

• Crime rates: If you are considering a home (or already own a home) in an area that has a high crime rate, you will almost always pay more for coverage. Consider opting for more coverage if you are in a high crime area.
• Severe weather: Frequent severe weather will always push up the cost of homeowners insurance so if you live in an area where hurricanes, tornadoes or hail are common you will pay more for coverage. In addition, you may want to consider flood insurance. Flood damage is always excluded from a standard homewners policy so to be fully protected you will need to carry a separate flood insurance policy. 

Insurers in states where hail is common may have a hail deductible that applies to their policies which means that you will pay a percentage of your dwelling coverage limit as a deductible instead of a flat amount. As an example, if you are carrying $300,000 in coverage and your policy has a 3% windstorm or hail deductible, you will have to cover $9,000 of any repair bill related to hail. Always be sure you fully understand your policy and the deductibles associated with it. If you don’t understand something, ask your agent to clarify. 

• Proximity to fire station: How quickly the fire department can get to your home will impact your premium. Look for homes that are located within a mile of a fire station, they will often cost less to insure. If you are located miles from a fire station, you may want to consider higher coverage limits. 

Your home’s features will impact your premium

Insurers consider a variety of factors when setting a premium and your homes features are one that can push your premium up or down. The bigger your home, the more it will cost to insure and construction materials and safety features are also considered. 

If your home is protected by a monitored security system, impact resistant roof or has a sprinkler system you can ask your insurer for a discount. Check with any insurer you are considering for a list of the discounts they offer and look for one that offers discounts for the features your home already has installed. 

Read third-party ratings

There are a number of third-party organizations that rate insurance companies, and you should read their reviews before deciding on an insurer. J.D. Power is an excellent source of ratings for overall customer satisfaction. J.D. Power considers a variety of factors when rating insurers including real customer feedback, cost of policies as well as agent interactions and claim handling.

You should also consider an insurers financial strength. Check their ratings with AM Best and Standard & Poor’s (S&P) to make sure any insurer you are considering if financially sound. 

Compare quotes 

When shopping for coverage, always get quotes from a number of insurance companies and then compare both coverages and the premium. Be sure you are comparing apples to apples when it comes to coverage levels as well as deductibles. 

Never shop on price alone. While choosing the lowest premium may seem like a good idea, if the insurance company is not financially sound, they may not be able to pay you if a major storm hits. In addition, a company with poor customer service or claim handling may be more of a hassle than the savings is worth. While your premium is important, it shouldn’t be the only factor you consider. 

Also consider the discounts each insurer offers and look for discounts one insurer may offer that another might not. Common discounts include bundling home and auto insurance, paying your annual premium in full, having a monitored home security system and having no recent insurance claims on your current policy. 

A few additional factors to consider

While your premium is always important to consider, as is the financial strength of the insurer, you should also consider customer service and how easy it is to file a claim. Here are a few factors to consider:

• Accessibility: Look for insurers that offer great customer service and consider their accessibility options and how you prefer to interact with your insurer. Many insurers have going online, so if you like to work with an actual person, look for an insurer that has a local office. Look for insurers that offer 24/7 customer service and claim reporting so you can access your policy or file a claim any time of day or night.
• Digital management: On the other hand, if you prefer to handle your insurance issues online, look for an insurer that has a major digital presence and allows you to file claims, pay your premium and talk to customer service online.  
• Claim handling: Always look for an insurer that ranks well for claim handling. When you home is damaged or destroyed, you don’t want to have to fight your insurer every step of the way. Read J.D. Power Property Claim Satisfaction Study to learn which insurers are best at handling claims in your area.