How to Choose Home Insurance: Step By Step

how to choose home insurance

You’ve just bought your new home. Now it’s time to insure it. Don’t worry; obtaining homeowners insurance isn’t as intimidating or difficult as your family and friends likely make it sound. However, if you’re trying to figure out how to choose home insurance without having to pay a huge monthly rate or jump through hoops, you’ll need a little knowledge under your belt. Below are simple steps to land you an affordable and comprehensive home insurance policy.

Step 1: Determine How Much Coverage You Need

When determining how much coverage you need, make sure you’re insuring your home for as much or more than what it would cost to replace it, not the original amount it cost you when you bought it. This coverage needs to factor in materials brought to the site and rebuilding your home if it’s destroyed or damaged.

Generally, your home will probably cost more to have it rebuilt due to inflation. Keep in mind; however, even if you have acres and acres of property, your insurer doesn’t insure the land your home sits on, so the dollar amount of your insurance policy could be substantially less than the dollar amount you invested in your home.

Step 2: Get to Know the Home 

Ask the seller for a claims history report. This report provides details of any prior damage to the house like flooding, fires, or other occurrences. This report will give you an idea of any weaknesses in your home that may raise your monthly rate or may make it harder to insure it altogether.

Step 3: Determine and Understand What’s Covered

A homeowners insurance policy normally covers your home’s structure, detached structures, and personal contents. It also provides liability coverage that protects you from lawsuits for property damage or injuries of other people on your property. Your policy may also cover living expenses if you’re displaced temporarily because of home damage. There are usually limits to these types of coverages, but you can adjust the limits by paying extra.

Step 4: Shop Around to Get Quotes

It’s a good idea to gather up multiple quotes from various home insurance providers to find a policy that’s right for you. Using an “independent” insurance agency will make this task easier for you, as they take care of the leg work. You’ll want to get information on their deductibles, coverages, and limits as well. Don’t sacrifice coverage by purchasing the bare-minimum either. You don’t want to be left having to pay out-of-pocket for a claim you weren’t covered for or weren’t covered enough.

Remember that honesty is the best policy here, so be honest when answering questions and choosing coverages. Your independent insurance agency can give you dependable protection if you provide them with the correct information. Your homeowners insurance policy is very important, so if you’re unclear about anything, be sure to talk with your insurance agent and have them explain anything you’re not clear about.

Get multiple home insurance quotes by submitting our online quote form.