How to Shop for Home Owners Insurance

The proper coverage is crucial to protecting your home and possessions.

The proper coverage is crucial to protecting your home and possessions.

If you have a mortgage, you need homeowner's insurance. Purchasing the right insurance is key to protecting your home and its contents. If a theft or fire occur, the last thing you want to worry about is how to replace lost items. Talk to friends, shop around, and you can find the right insurance to fit your needs.

Step 1

Know your needs. Make a list to determine how much coverage you need. At the very least, you'll need a policy that covers the cost of repairing or replacing your house, if damage occurs. The minimum coverage is what it would cost to rebuild your home in case of a disaster. Don't fall into the trap of insuring your house for what it would sell for.

Step 2

Take inventory of your possessions. You probably will want to purchase additional coverage for the contents of your home. Calculate costs for valuables such as jewelry and electronics. Your insurance company may want appraisals for certain items to prove their worth in case of loss.

Step 3

Shop around. Call several insurance companies to obtain estimates. Consider contacting an independent insurance agent, who can compare several rates and companies, as well as help you determine the proper policies and coverage.

Step 4

Research basic policy language. For example, Insure.com recommends you "understand the difference between 'replacement cost' and 'actual cash value.'" The former is what it costs to replace an item, while the latter is the dollar value.

Step 5

Review your policy. You may find that you need to increase the limit on certain items. For example, a standard policy might only cover a percentage of household contents. You can always buy more coverage if needed.

Step 6

Remember that after obtaining your policy, filing claims can affect your future premiums, and may even lead to the insurance company dropping you. Before filing a claim, consult your agent to see if it is worth it.

About the Author

Julia Forneris has been a writer and editor since 2002. Her work has appeared in economics magazines such as "Region Focus" and on various websites. The editor of Scratch That! Editorial, Forneris holds a Master of Arts in literature from Virginia Commonwealth University.

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