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Compare Home Insurance And Get Quotes Online

Getting home insurance is a rite of passage for all adults, but knowing what you need is confusing. Here’s how to compare home insurance rates and policies and find out what coverage you need.


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When Lauren and I bought our first home three years ago, everything about being first-time home buyers was new: making an offer on the home, applying for a mortgage, even getting home insurance.

When you’re wrapped up in the excitement and contractual drama of buying a new home, the homeowner’s policy can seem like a footnote. You just have to get an insurance policy before you close. As we prepare to move to our “forever home” in just a couple of weeks, I was recently reminded of this.

I got a frantic call from our mortgage lender asking where our home insurance policy was. I had dropped the ball on contacting State Farm, our existing insurance company, about the new home. Come to find out that because of the older age of our new house and its proximity to water, State Farm wouldn’t insure it. Fortunately they referred me to a local independent agent who shopped the policy around (very quickly I might add) and got us a homeowner’s policy in the nick of time.

Why don’t we pay more attention to home insurance? Relatively speaking, home insurance isn’t expensive. It’s not uncommon for your annual car insurance premium to cost more than your home insurance coverage. And once you have home insurance, if you have a mortgage with an escrow account, your lender simply pays the home insurance premium. It’s easy to forget it’s even there. But just because it’s inexpensive doesn’t mean it’s unimportant.

What does you home insurance policy cover?

Your homeowner’s policy (sometimes called hazard insurance) serves a number of functions. Although actual coverage will depend on your state and policy, here are some of the more common things home insurance covers:

  • Repairs to your home in the event of fire or other covered disaster.
  • Belongings that are damaged or stolen.
  • Claims made against you by somebody else. For example: injuries sustained on your property, dog bites, even slander or libel.
  • Your home insurance policy may even cover injuries you cause others outside of your home.

What won’t your home insurance policy cover?

There’s one big thing home insurance doesn’t cover: Flood damage. If you live in a federally-designated flood area, your mortgage may require you to have flood insurance, which is pricey. It can be purchased through the National Flood Insurance Program or most local insurance agents.

Your homeowner’s policy may also exclude or limit coverage from damage by earthquake, hurricane, hail, or tornadoes. In many cases, you’ll need to add additional coverage to your policy for these items.

Other things that home insurance won’t cover include normal wear and tear on your home (including things like furnaces or air conditioners failing because of old age).

Finally, although home insurance covers belongings like technology and jewelry, there are limits. If you have a lot of expensive jewelry, you may want to look into additional coverage above and beyond your home insurance.

With all of the variables about what home insurance will and will not cover, it’s so important to pay attention to your home insurance policy and make sure you understand it. A good insurance agent will walk you through it. Hopefully, you’ll never need your home insurance, but if you do, you don’t want surprises.

How to buy home insurance

As I recently learned, perhaps the best way to buy home insurance is to work with an agent who can walk you through the various coverage levels available. You may decide, for example, to pay a higher deductible in exchange for lower premiums or purchase coverage above and beyond what your mortgage requires. Allstate is a reputed national insurer with an easy way to get quotes online even if you choose to work with a local agent later.  Independent insurance agents can also be a great way to go. These agents work with a variety of insurers to get you the best rate and coverage for your needs.

If you’re buying a new home, you’ll need to shop for and buy home insurance before you close on the new house. After that, it’s a good idea to review your policy every year or two to make sure your coverage is adequate. Anytime you make improvements to your home or buy expensive property (like jewelry) it’s a good idea to notify your insurance carrier and make sure your policy is up to date.

Photo credit: James Weliver.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Even more overlooked is renter’s insurance, but it’s something that every renter should have. Just like homeowner’s insurance, it will cover the value of your possessions in the event of fire or other disaster. But even more important, it covers your liability in the case that someone gets hurt in your apartment and, like David wrote above, even if you injure someone away from your home. This coverage is cheap and provides a huge layer of security.

    Your landlord’s insurance does not cover your possessions or your liability. If you are a renter and you don’t have renter’s insurance, you are leaving yourself exposed in a big way. The most important thing is to make sure you have a policy with the maximum liability limits. This will probably cost you only $20-30 per month.

    Thanks for the helpful article. Insurance isn’t a fun topic but it’s definitely important to consider as part of your financial plan.

  2. This is a great article David! I work for an insurance firm in CA and we speak with countless customers who have no idea what they are insuring. We give advise daily on how to best protect their assets and save them money. Many times they are unaware of the gaps they have in coverage. A great way to fully protect everything around you is to consider purchasing an umbrella policy providing excess liability over cars, homes, and other valuables. The blanket limit it gives you provides broader coverage and peace of mind. You don’t know how many people have never even heard of this type of policy. The cost of these policies usually start around $300 a year depending on the risk involved. Good work in bringing this topic to the financial forum! In order for us to have our financial life in order we have to protect the money we are investing and insurance is a great way to start!