1 - KNOW YOUR OPTIONS
The most important step is researching your options. You won't know for sure that you are getting the best coverage and price unless you compare and contrast policies and get price quotes from multiple companies.
Prices vary widely between carriers due to each company using different algorithms to calculate their customers' premiums. Comparison shopping could save you hundreds of dollars each year.
You can save time by using an insurance aggregating website such as homeinsurance.com to view multiple quotes at once. You can check average insurance premiums by state, also. By taking the time to speak with an agent individually, you will be more likely to receive an accurate quote, based on your credit score, location, type of home and coverage needs.
It can be beneficial to look at surveys of the best insurance companies, which ask real consumers about their policies and experiences. Consumer Affairs recently published their list of the Top Ten Best Rated Homeowners Insurance Companies for 2016. The smaller company with the better price may seem good, but it may not be worth it in the long run. Remember "large national companies" are more likely to invest in emergency response equipment and technology, which gives them an edge. While you may pay a little bit higher of a premium, you are more likely to receive a swift response in a disaster.
2 - BUY THE BUNDLE
When searching, ask if they are willing to bundle your home and auto coverage. Discounts for bundling will vary by carrier, but opening a multi-line policy can save you anywhere from "3 percent to 22 percent" according to Amy Danise, editorial director of www.insure.com/ in an interview for Equifax.
3 - TALK TO AN EXPERT
You may have better luck finding the best policy by talking with an independent insurance agent who works with many different carriers. Because they are not tied to just one company, they may be able to find you the best coverage for your needs.
Streamline their interview process by having the answers to the following questions ready:
- What type of property are you insuring (townhome, condo, single-family, duples, etc.)
- How many residents will live in the unit?
- What is the square footage - How many stories does it have?
- What type of siding and roof does the property have?
- Number of fireplaces - wood burning, gas log?
- Does the property have a monitored alarm system?
- What is the approximate value of the personal property you want to protect in case of loss?
4 - INTERVIEW THE CARRIER
You will be asked seemingly endless questions, but don't forget to ask your share of the questions, too. Remember to ask the following questions:
- What is included in the policy? Is there coverage for just the home dwelling or for the actual housing structure, as well as for personal property and people, too.
- What are the limits for coverage on personal property?
- What is the liability coverage?
- What is the loss of use coverage?
- What coverage is offered for flooding and weather-related issues?
5 - UNDERSTAND THE COVERAGE
Understand your coverage before you sign. People tend to think of their property insurance as one big safety net and catch all that will protect them in any kind of disaster or emergency. Unfortunately, many kinds of natural disasters are not covered under standard policies.
For example, if your property is in a state prone to hurricanes, you will need to ask about buying window protection coverage. In states prone to sinkholes, earthquakes or mudslides, you would need to pay for additional "earth movement coverage". Flood damage is also not covered by standard homeowner's insurance. Speak to an agent about any of the additional coverages you may need before purchasing a policy.
FINDING THE RIGHT POLICY
While taking the time to interview companies and pouring over the fine print of policies may seem like a hassle now, you will rest easier knowing that you will have the help you need in the event of a disaster. Selecting the right insurance coverage for your investment property will give you the peace of mind while knowing your asset is protected.