How to Choose the Right Home Insurance

Whether you own a large mansion, an average family home or a quaint condo, you care about the belongings in your house.  From family photos to big screen televisions, you would like to know that things can be replaced in case of a theft, fire or flood.  Homeowners insurance is for everyone. You just need to know how to choose the right home insurance policy for your situation.

1. Determine what type of insurance plan you need.  If you own your home, you can get a traditional homeowners policy.  If you are making monthly payments on your house, you will need a policy that ensures the loan will be paid off if something serious happens to your home.  Renters can purchase HO-4 plans that insure the belongings inside the apartment, townhouse or condo.


2. Evaluate your belongings and decide if you have any belongings that you want to insure separately, like wedding rings, fine art or expensive computer systems.  These special items can be added as an umbrella policy in your homeowner’s policy.  There is an additional annual cost for this insurance, but a claim on these items is exempt from your deductible.


3. Decide how much you can afford to spend if something tragic happens to your home or your belongings.  This will help you determine what your deductible should be.  A higher deductible equals a lower premium; whereas, a lower deductible equals a higher premium.  On average, most homeowners carry a $500 to $1000 deductible.


4. Contact a local homeowner’s insurance agent to evaluate various homeowner policies that may fit your specific needs.  Reputable insurance agents in your area can be found by searching MerchantCircle.  This website has company descriptions, contact information and customer reviews.


5. Look for a policy that has enough insurance to replace your home and belongings in case you have a major claim.  You don’t need to have too much insurance, either.  For example, if your home is worth about $100,000, then you should have a plan that is between $100,000 and $110,000.  Having more insurance will not get you more money in a claim.  It will increase your premiums.  Having less insurance than the value of your home may cause you to spend money out of your own pocket when filing a major claim.


6. Review all of the sections in your homeowner’s insurance policy.  If you do not understand a certain section, ask your agent to explain it to you.  You are responsible for understanding what you have purchased.  Watch for unnecessary fees like including the value of the land in your property.  Land cannot be replaced and it does not belong to you.  You can only insure what is on the land.  Make sure your policy covers people visiting your home.  If someone should get hurt on your property, your homeowner’s insurance plan will cover it.