Insurance 101 > Shop for Insurance
Today more
than ever, Texans have many options when it comes to buying homeowners
insurance. It pays to take advantage of companies competing for
your business and shop around to find the best policy to meet
your insurance needs.
These tips will help you do just that:
Shop Around
Before you sign on the dotted line, get quotes from several providers and compare
premiums. You may ask friends and colleagues for referrals or enlist the help
of an insurance agent who can present policy and price options from several
companies. Remember to consider more than cost when choosing an insurer. Customer
service should be a priority as well.
Determine Your Coverage Needs
You should buy
enough coverage to
avoid a major financial
loss if your home and
belongings are completely
destroyed and
have to be replaced or
rebuilt.
Since construction
costs
change, homeowners
should reassess "replacement costs"
annually to be sure
they're fully covered.
Note that your lender may only require enough
insurance to cover your outstanding mortgage
balance but that may not be enough to cover
"replacement costs."
If you own valuables like jewelry or collections,
you may need "endorsements" that add coverage to
your policy.
Rethink Your
Deductible
A deductible is the pre-determined amount you
pay before the insurance company starts to pay for
your loss. To keep your monthly premiums as low as
possible, you should choose the highest deductible
you can afford in case of a loss.
Ask About Discounts
Many companies offer discounts if you proactively
protect your home against a loss. You may get a
lower premium if you have a home security system,
smoke detectors, fire extinguishers or an impactresistant
roof. You may also qualify for a discount if
you buy your auto and homeowners insurance from
the same provider.
Know the Cost Factors for Insurance Premiums
Several factors can affect the cost of your premium,
including the county where you live, the level of
fire protection available such as the distance to the
closest fire station, the construction type and condition
of your home, and current construction costs.
Severe Texas weather, fraud, and the rising cost of
lawsuits also drive up the cost of insurance in Texas.
Maintain Good Credit
Credit information is one of
many factors used by some
insurers to determine insurance
premiums because of the
proven relationship between
credit and the risk of claimed
losses. It is important to maintain
good credit and monitor
your credit history. You can
get a copy of your credit report
by contacting the three main
credit bureaus:
Experian www.experian.com
Equifax www.equifax.com
TransUnion www.transunion.com
Make Common Sense Claims
Once you've chosen an insurer, remember that
insurance is for major losses, not regular maintenance
of your home. Taking care of your house
and using common sense with claims will keep
your premiums in check.
Ask for Help
Ask for Help
Insurance agents and customer service representatives
are there to help you choose the best policy
for your home. Don't be afraid to ask questions and
use additional resources if you're having trouble
finding insurance.
The following links are
helpful for insurance shoppers:
Help Insure
http://www.helpinsure.com
Texas Coalition for Affordable Insurance Solutions
http://www.tcais.org
Texas Fair Plan
http://www.texasfairplan.org
Texas Department of Insurance
http://www.tdi.state.tx.us/consumer/shopping.html
Sources:
Texas Department of Insurance, "Shopping Smart"
Insurance Information Institute, "12 ways to lower your homeowners
insurance costs"
The USAA Educational Foundation, "Lifeguide Series: Homeowners Insurance"
American Insurance Association, "Homeowners Insurance: Why Costs Go Up
and What You Can Do to Save Money"
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