Purchasing home insurance can be daunting when you consider all the different pieces of the puzzle in evaluating policies and coverage. However, beyond the usual factors that most people consider when purchasing insurance (cost and coverage), there are a number of other issues that can really make a difference. Not all insurance policies and not all insurance companies are the same. Notwithstanding the actual policy’s coverage or cost, these are some other factors that you should consider in your insurance purchase.
- Insurer Rating
When you purchase insurance, you’re counting on your insurance company to be there at potentially the worst time in your life. Insurance companies need to be reliable, secure, and financially sound. Of course, you’re not the only person who thinks this way and there are rating agencies whose sole purpose is to evaluate the financial strength and claim-paying ability of insurance companies. The most well-known of these agencies is A.M. Best and their ratings are available to the general public on the Internet. You should always investigate any company you are considering (and no, they don’t grade on a curve).
- Internet Presence
In today’s digital age, more and more people want the ability to conduct transactions online around the clock. Unfortunately, not all companies do business online as effectively as you would like. If the ability to review your insurance policy and make changes to your coverage online is important to you, it’s best to evaluate this prior to signing up with a specific company. Insurance companies who invest in developing robust Internet capabilities can save money in the long run by allowing customers to do some of the work that used to be performed by human employees. On the other hand, if you like that personal touch, you’ll also want to investigate the opposite, which is determining the quality of an insurance company’s telephone customer service. In either event, you should know in advance what to expect from any company that you plan to do business with.
- Payment Plan
If you are concerned about your insurance premiums (and who isn’t?), you might want to find a company that offers flexible payment options. Most companies will allow you to pay your insurance premium in installments, with a down payment. However, some companies might charge you extra to extend these payments in monthly installments. Others might request an entire year’s premium at one time or only offer quarterly installments. Not every company handles premium payment in the same way. If this is of concern to you, then definitely inquire in advance and make this a part of your evaluation when selecting a policy and insurance company.
- Multi-Lines Offering
Some insurance companies only write one type of insurance. If the home insurance company you are considering only writes home insurance, you might want to give that a second thought. If you also need to purchase auto insurance and a personal umbrella policy, many insurance companies will provide you with a discount if you purchase all three with the same company. By selecting an insurance company that does not offer multiple lines of coverage, you might be missing out on a potential source of discounts. (Okay, I cheated — this factor is a bit related to cost.)
In addition to the usual suspects of coverage limits and premium, there are definitely many things to consider when evaluating your insurance purchase. The more you know and plan in advance, the more likely it is that you will be satisfied with your decision.