How to Evaluate Home Owners Insurance

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bucky6225
Posts: 17
Joined: Wed Feb 01, 2017 4:26 pm

How to Evaluate Home Owners Insurance

Post by bucky6225 » Sun Jun 02, 2019 8:48 pm

We are first time home buyers, closing on a place very soon. A couple of questions about home owners insurance.

1. We are not as concerned with finding the absolute lowest cost policy, but would rather error on the side of being "over-insured". My question is what extra coverage should we consider beyond the regular items (dwelling coverage, attached structures, personal property, living expenses liability)? We have added water back up. Should we consider any others?

2. Which providers are considered to have the best service? For example, will some insurance companies be more difficult to get a claim approved than others? Again, I'm willing to pay more for a policy with a reputable company. I've gotten what appears to be competitive quotes from Allstate and State Farm, but I just learned about Amica, and it seems they may be easier to work with?

Any guidance is appreciated.

Iridium
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Joined: Thu May 19, 2016 10:49 am

Re: How to Evaluate Home Owners Insurance

Post by Iridium » Sun Jun 02, 2019 9:23 pm

bucky6225 wrote:
Sun Jun 02, 2019 8:48 pm
We are first time home buyers, closing on a place very soon. A couple of questions about home owners insurance.

1. We are not as concerned with finding the absolute lowest cost policy, but would rather error on the side of being "over-insured". My question is what extra coverage should we consider beyond the regular items (dwelling coverage, attached structures, personal property, living expenses liability)? We have added water back up. Should we consider any others?
Earthquake and/or flood insurance, if applicable. Make sure your personal liability coverage is in line with your assets and income. Dwelling and personal property ought to be covered on a 'special form' basis rather than a 'broad form' basis (this also makes claims a lot easier, because there are fewer reasons for the company to deny a claim). In the ideal world, you would also have extended replacement cost coverage to the tune of 25-50% of dwelling coverage.

Most of the rest of the stuff, honestly, can be lived without, as they cover small problems. If you have some weird claim for $5 K that doesn't get covered, you have an emergency fund for that. Whereas the dwelling getting substantially destroyed in an uncovered manner would be devastating.

Topic Author
bucky6225
Posts: 17
Joined: Wed Feb 01, 2017 4:26 pm

Re: How to Evaluate Home Owners Insurance

Post by bucky6225 » Mon Jun 03, 2019 7:47 am

Thanks for the advice.

Does anyone have any thoughts about best insurance providers in terms of service, filing a claim etc?

megabad
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Joined: Fri Jun 01, 2018 4:00 pm

Re: How to Evaluate Home Owners Insurance

Post by megabad » Mon Jun 03, 2019 4:33 pm

bucky6225 wrote:
Sun Jun 02, 2019 8:48 pm
We are first time home buyers, closing on a place very soon. A couple of questions about home owners insurance.

1. We are not as concerned with finding the absolute lowest cost policy, but would rather error on the side of being "over-insured". My question is what extra coverage should we consider beyond the regular items (dwelling coverage, attached structures, personal property, living expenses liability)? We have added water back up. Should we consider any others?
If the home is a large part of your assets, and you are very risk averse I would consider a true guaranteed replacement policy. This will be more costly but will actually replace your home back to its contemporary condition regardless of the actual cost. Almost no one has a policy like this and none of the largest providers will offer your this without you requesting it.

I agree with flood insurance (separate from policy) if there is any risk at all of flooding. Whether you are in an official flood zone isn't relevant to me.

Additionally, when I bought my first home I added every water protection I could (sewer backup, water line protection, etc). These were super cheap.

For my first home I also added sinkhole coverage.

By far the most critical to me is to add an umbrella (if you are super risk averse).


2. Which providers are considered to have the best service? For example, will some insurance companies be more difficult to get a claim approved than others? Again, I'm willing to pay more for a policy with a reputable company. I've gotten what appears to be competitive quotes from Allstate and State Farm, but I just learned about Amica, and it seems they may be easier to work with?
Best companies for customer services are regularly indicated to be Amica and USAA by leading publications. Most others are rated an order of magnitude lower but YMMV. I usually just pick the lowest price out of anybody with a decent AM Best rating.

Any guidance is appreciated.

ChicagoBear7
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Re: How to Evaluate Home Owners Insurance

Post by ChicagoBear7 » Mon Jun 03, 2019 4:55 pm

Make sure your policy has sufficient "Ordinance and Law Coverage"!

This covers the additional costs of bringing your home up to code after an incident. Replacement cost coverage does not apply if you can not legally rebuild "the same" structure. High end insurers (Chubb, Nationwide Private Client, Pure, etc.) typically include this to the full amount to rebuild and will also cover the costs of bringing the undamaged portion of the building up to code. For regular insurers you need to see what amount, if any, is included and how expansive is the coverage. (Some insurers will not provide coverage to bring the undamaged portion up to code and some limit the coverage to 10% of Coverage A). The amount of coverage, and limitations varies by company.

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prudent
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Re: How to Evaluate Home Owners Insurance

Post by prudent » Mon Jun 03, 2019 4:57 pm

One thing to look at is what "form" is being offered. See https://www.esurance.com/info/homeowner ... -explained .

The HO-5 form gives the broadest coverage (everything is covered unless specifically excluded - called "open peril"). That's better than a policy that lists what's specifically covered and anything not on the list is excluded ( a HO-3 form, called "named peril"). Important to understand when comparing prices.

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