How we choose the best home insurance companies
How we choose the best home insurance companies

How we choose the best home insurance companies

National availability

We start with a list of 99 insurers from the Department of Insurance and Department of Insurance websites within the states. To ensure that our picks for the best insurance company apply to everyone, we look for providers with coverage in at least 40 states and who have no special requirements for membership 

Although local or special eligibility insurers can offer a great policy at a competitive price to homeowners, large national companies often have more discounts and bundling opportunities. They are also better equipped to handle claims after a disaster. Their mobile claim centers, equipped with generators, satellite connections and agent workstations, can make a lot of difference in areas where there is no power.

Financial strength ratings

The ability to pay claims is the foundation of any insurance, so the best way to compare insurance companies is to look for financial solvency . To discover the highest-rated insurance companies, we gathered the financial strength ratings (FSRs) of the three major rating agencies, but we paid special attention to the ratings of AM Best, the only agency that focuses solely on insurance. We require at least an “A” rating from AM Best, as well as a strong (“A”) rating from S&P Global or a high quality (“Aa”) rating from Moody’s.

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Open risk policies plus endorsements

For detached, single-family homes, the main difference in policy types is between named perils , which only cover the specific perils named in the policy, and open perils , which do the opposite. Open risk policies may not be right for everyone, but they are the most popular homeowners policy within the US, so we look to vendors to offer them.

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Along the same lines of solid policy guarantee, we also wanted to have a series of endorsements (additional provisions that extend coverage in various ways). The more endorsements offered, the greater the ability to fill the options that your home and location require. Earthquake coverage, for example, is a common backup for Los Angeles homes.

Customer service

Good customer service ratings suggest easy communication between the homeowner and the insurance provider at every phase. When this is the case, you are likely to receive accurate quotes and sufficient coverage, and be adequately compensated for claims.

We analyzed JD Power’s annual US Home Insurance Study , which includes scores based on how well “customers rate the experience of claims made to their current home insurance provider” and three or more were required Power Circles. Consumer Reports also released data taken from nearly 10,000 respondents who filed claims from January 2010 to June 2016, in which they rated carriers based on criteria, including agent courtesy and hassle-free claim experiences. We are looking for a rating of 80 or higher.

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The best possible price equals a competitive initial quote, plus plenty of opportunities to save. Most providers offer the biggest discounts, such as owning a fire extinguisher or being claim-free. However, there are some rare discounts that make certain providers a better fit for certain homeowners. For example: Allstate’s “New Purchase” discount offers a small discount to homeowners who are moving into a new home for the first time. We collect and compare the discounts offered by each provider to help us make personalized recommendations for different types of owners.

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How to choose your homeowners insurance

Calculate the cost of rebuilding your home

In the event of a disaster, it is vital that you get the correct amount of coverage, as that is what you will pay for repairs and / or a complete rebuild. Coverage limits for personal belongings and other structures are related to the amount of coverage in your home, so you’ll have better protection for all of your property if you raise the policy limit for your home. “If you have a mortgage, your lender can only require you to buy a policy with enough coverage to protect your interests, especially if you have a low balance,” says Christina Moore, executive vice president and vice president of risk management at SWBC.. “But in the event of a substantial or total loss, the cost of rebuilding your property could be much more, leaving you with potentially large out-of-pocket expenses.”

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Catalog your belongings

“I recommend that people create video evidence of all their belongings, as well as inside and outside their home,” says Jeffrey D. Diamond , associate professor of insurance law at Georgia State University School of Law. Many providers have online lists that they can help you keep track of. “The more ways you can establish and test the characteristics of your home, as well as the quality and quantity of your personal property before a loss occurs,” adds Diamond, “the better your homeowners insurance coverage will be at the moment. of need, when the need arises. ”

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Consider your location

We constructed a map showing the historical frequency of floods and severe storms based on data from the Federal Emergency Management Agency (FEMA) and the National Emergency Management Association (NEMA). If you live in one of the dark blue areas, look for the specific backups that apply to your region and which providers offer them. Texas, for example, has the highest count of natural disasters. If you live in a region that is often affected by floods and storms, you’ll want to find a company that offers additional flood coverage or purchase it separately through the National Flood Insurance Program .

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Look for quotes

“Calling for quotes will take some time, but it’s worth comparing coverage and rates,” says Moore. Unlike auto insurance quotes, home insurance quotes are more accurate when you call to request them. Online tools are attractive because they make it seem easy to compare quotes from multiple traders at once, but they often simplify information gathering. For example, you may be eligible for a discount from a certain provider that is not listed online, or you may want a specific endorsement that is not offered online. Call for a trader to answer the specific questions you have and can give you quotes that are worth comparing.

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