How to Recognizing Good Homeowners Insurance Companies

Look for companies that are well rated and have deep pockets.

Homeowners insurance is key to keeping your biggest asset safe and providing you with peace of mind. While most of us shop for coverage based on price, the reputation and strength of the company underwriting the policy are just as important. There is no point in protecting your home if when you go to make a claim your insurance company can’t pay or gives you the run around before making a payout.

Before you sign on the dotted line make sure you do your homework. Here are a few things to look for in a homeowners insurance company.

Financial Strength

Having the proper capital available to pay its claims in the event of a major event like a hurricane or flood is paramount when choosing a home insurer. Using the data of major rating agencies such as A.M. Best and Standard & Poor’s is a great way to determine if your insurer will be able to cover your claim.

Look for companies that are well rated and have deep pockets. Catastrophic events such as hurricanes, tornados, and floods can quickly drain a poorly capitalized company so make sure your insurer is financially strong.

Claims Response

How quickly and fairly an insurer responds to a claim is important. Your life could be on hold while you wait for a payout, leaving you with little money to start repairs on your home or replace your belongings.

Verify whether your claim will be handled by licensed adjusters or a third-party call center. Check with your agent in regards to their experience and feedback with various carriers in regards to handling claims. There are also third party web sites that offer reviews of insurers as well as real-life descriptions of how claims were handled. Don’t settle for anything less than an insurer who has a track record of paying fair settlements in a timely manner.

You may be also interested in reading: Get Your Homeowners Insurance Claims Paid Faster!

Varying Deductibles

Some insurers are moving to separate deductibles for damage that is caused by certain weather related events. This deductible often applies to the roof and they can end up costing you thousands of dollars. A market value roof replacement means that instead of covering the entire cost to replace your roof, your insurer will pro-rate the value based on the age of your roof, this could leave you on the hook for a huge portion of the replacement cost.

Look for insurers that have a straight deductible on their policy. Ask your agent for details.

Agents

Insurance can be complicated so you want to make sure that your local agent is more than just a salesperson. They should be willing to work with your family to make sure that you are fully covered, helping you understand the risks and how to evaluate how much coverage you need. Good agents and brokers work hard to build their reputations and will not work with insurance companies that have a less than stellar reputation.

Ask friends and family for recommendations and make sure you are comfortable with any agent that you choose.

Customer Satisfaction

Customer retention rates are an excellent way to determine if an insurer is taking care of their policyholders. Ask your agent or a company representative what their current retention rate is for policyholders. Look for companies that have a retention rate of at least 80% to 90%. This information is also available in annual reports. Insurers unwilling to share this information should be avoided.