Home Insurance: Tips for Choosing an Insurer

How to choose the right home insurance company for your needsWhen Suzanne Patt went shopping for a home insurance policy, she ran into a problem: her daughter's trampoline. Some carriers refused to issue her a policy as long as the trampoline was in place; others were willing to include it, but at substantially higher rates. "That really limited my choices," says the Cranford, N.J., home owner.

Special features like trampolines and swimming pools are just two of the things that can make shopping for home insurance a challenging task for first-timers. The more prepared you are up front, the better you can compare different providers' offerings and rates.

If you're shopping around for a home insurance policy, here are some tips to help you get started.

1. Ask for recommendations

Harry Claussen, owner of Claussen Insurance Agency in Chester, N.J., recommends asking friends, relatives, co-workers and neighbors who they use for their home insurance. "Ask them why they use them and how they found them," he says. "Also -- and this is crucial -- ask them if they had a problem or accident at home and had to file a claim, how smoothly the claim process went, what was covered and what wasn't."

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2. Compare quotes

You can shop on your own to find home insurance and buy it direct from the company, or you can work with an insurance broker to help you find a policy. (As with insurers, it's wise to ask for referrals before you choose a broker). Brokers typically have access to multiple insurance companies and can act on your behalf to put together a home insurance policy that meets your specific needs. Brokers can be particularly helpful if your home has unusual features (or a big trampoline in the backyard), because a good broker will have a handle on what various carriers will and will not cover.

If you're buying directly from an insurance company, keep in mind that product selection and premiums vary from carrier to carrier, so it really pays to shop around. Get at least three price quotes from insurance companies, insurance agents and via Internet sites like InsureMe and NetQuote. Your state insurance department, as well as other state insurance organizations, can help you determine what insurers charge for homeowner policies in your area.

3. Check out the company's record

Because you buy home insurance to protect you financially, you want to buy it from a company that is financially sound and will be around to provide that protection. Check that stability by running companies through independent rating agencies. "Your top candidates should be rated A or better," says Claussen.

Also, make sure that the insurer is licensed to operate in your state. That way, if there's ever a problem, you can contact your state insurance department for help. Every state's insurance department has a list of insurers that are licensed to do business there, so that should be your first stop when vetting a company.

4. Evaluate their customer service

Good customer service is crucial, especially if you ever file a claim -- when you'll have to keep in contact with the company until the matter is settled. Your insurance company and its representatives should answer your questions quickly, efficiently and in detail. Ask other policyholders whether they received good customer service. Check with your state's insurance department to see if the insurer has had many consumer complaints about its service. You can also check their standings by going online to the Better Business Bureau and the National Association of Insurance Commissioners.

Whether you buy your home insurance through a broker, over the phone or through the Internet, make sure that the company and its local agent is easy to reach if you have questions. It's important to have peace of mind before you sign any type of policy.

For more on home insurance and related topics see these AOL Real Estate guides:

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