5 Tips for Choosing the Right Home Insurance

Choosing the right home insurance can be a headache especially if you are a first-time buyer.

How do you know which insurer is the best fit for you? How do you know which plan to choose? And is it really necessary to opt for full coverage or is it just a waste of money?

These are common questions that homeowners ask in their search for finding an affordable, trustworthy insurance provider. 

The unfortunate reality is that many homeowners do not have adequate cover and find themselves under immense stress in the case of an emergency.

Statistics show that in 2021 about 60% of homes are underinsured because homeowners are uninformed about insurance policies and plans.

You might think nothing bad will happen to you until it does. It is better to make sure that you are fully covered, even if you have to pay a few hundred bucks extra every month. 

So how exactly do you choose the best service provider? Here are a few tips to consider when looking at home insurance policies. 

1) Understand the policy 

The most important mistake homeowners make is skimming through an insurance policy without paying careful attention to what they are getting.

This leads to frustration and anger when they want to claim and the company doesn't pay out what they have expected.

When looking at a specific policy, take your time when reading through it. You must understand the policy, what it covers, and how it will benefit you in case of an emergency.

Also, remember to read the fine print. It is something most of us ignore because it is so small but that is what insurance companies bargain on. This will ensure that you understand the policy in its entirety. 

2) Choosing the right type of home insurance

Once you have narrowed down your choices, you have to assess your needs. This will help you decide which of the policies will work best for you.

Home insurance plans are often separated into two categories: home contents insurance and building insurance.

Home contents insurance covers everything inside your house. You can list furniture, electronics, clothing, jewellery, and other valuable items that will be covered by this type of policy.

Building insurance only covers the structure of your house. This type of policy covers your building against weather damage or accidents and usually includes windows, doors, and the roof.

You can decide whether you need the full coverage of both these types of insurance or not. 

3) Do a home evaluation before choosing home insurance

The value of your home is a contributing factor to your home insurance as well as your claims.

As homes increase in value over the years, your premiums will change, too. The amounts that you can claim will also increase along with it.

Before you choose a home insurance plan, do a home evaluation to get a better idea of what you will be paying and what you can get out.

You can also do annual home evaluations to keep your insurance records up to date. This will also give the insurer an idea of any changes you made to the house as the years pass. You might have added another story or built a cottage in your backyard. 

4) Invest in a home security system

Before contacting the insurance company to evaluate your home, invest in a home security system first.

Insurance companies often perform risk-based evaluations that are based on crime statistics in your area. If the crime statistics are high and you don't have a security system, then your premiums might be a bit more.

A home security system can reduce this amount per month and you have peace of mind, too.

You don't have to install high-tech equipment like electric fencing and CCTV cameras. An alarm system and panic buttons should do the trick. 

5) Research as much as you can

Just because an insurance policy looks appealing does not mean it's the right one for you.

Never choose the first thing you see. Always make sure that you shop around first and do your homework.

Contact as many insurance providers as you can and speak to individual agents.

Get the answers to all the questions you have, no matter how silly they might seem to you. If agents try to push you in a specific direction, trust your gut and go with a policy that will suit your needs.

It is also a good idea to chat to family members and friends about their insurance providers to find out what they think about them. 

Final thoughts

Choosing a home insurance plan is a big responsibility because the wrong policy can cause unnecessary stress and expenses in the long run.

Consider these few tips, do enough homework, and stick to your own needs.