Buying a home, as we all know, is a huge investment, and it’s only good sense to protect that investment. That’s why almost all homeowners carry insurance – besides the fact that it’s required by mortgage lenders (for they want to protect their investment, too). But not all homeowners insurance policies are created equal, and it’s tough sometimes to sort through all the possibilities to find good insurance. Making things even more difficult is the fact that, owing to various natural disasters and weather events, the cost of coverage is rising dramatically. It’s imperative, then, that you know how to find the best homeowners insurance policy in Metro Detroit Michigan.
Shopping for a Homeowners Insurance Policy in Metro Detroit Michigan
You absolutely must shop and compare in order to find the best homeowners insurance policy for your needs. Following are the recommended steps:
THINK ABOUT YOUR LOCATION
The first step is to think carefully about your location (even before buying the home) and how that will affect your insurance premiums and coverage. You may pay more for insurance, for example, if you live in a small town with no fire department or if you live in an area subject to flooding or tornados.
Although your lender will require you to get insurance, you can still shop for the best homeowners insurance policy in Metro Detroit Michigan. Compare company reputations and ratings, and be sure to get several quotes. Also, don’t sacrifice protection in order to save a little money, and be sure to check out each company’s reputation for customer service.
In searching for the best homeowners insurance policy in Metro Detroit Michigan, it’s also a good idea to compare third-party ratings. An insurer’s rating analysis, according to industry experts, “involves comparing the business to other businesses, and evaluating them against industry standards. Put simply, it’s an assessment of a company’s ability to meet its obligations to customers (such as paying claims), which can help provide peace of mind.”
Today, there are many insurance companies that are primarily online businesses. So be sure to include these companies (such as Esurance)in your search to make sure you leave no stone unturned.
CHECK COVERAGE FOR EXTRA COSTS
Typically, a homeowners insurance policy in Metro Detroit Michigan will cover your home for replacement cost, not just market value. But replacement will entail not only the cost of materials and labor, but extra costs for things like transporting and storing materials. Make sure your policy allows for these costs as well.
The deductible is simply how much you pay out your pocket on a claim. A higher deductible will make monthly premium payments lower, but you’ll pay more in the case of a claim. A lower deductible, on the other hand, “means you’d pay less out of pocket after a claim – but your homeowners rates may be higher each month. There are pros and cons for both cases, and ultimately it comes down to your financial security and personal circumstances.”
UNDERSTAND YOUR COVERAGE
Sadly, many homeowners don’t know what their homeowners insurance policy in Metro Detroit Michigan actually covers. But you simply must know what your policy does and does not cover. Be sure to ask your insurer about this, as well as consulting your real estate agent. (Find out more by calling 248-330-4421.)
Additional Considerations for a Homeowners Insurance Policy in Metro Detroit Michigan
After locating some good candidates for your insurance company, you need to consider some critical factors before making the final decision and then building a policy, such as:
MARKS OF A GOOD INSURER
According to Consumer Reports, the “best test of an insurer is how well it handles claims. . . . Companies’ damage estimates were among the best predictors of customer satisfaction. Lower-rated insurers [tend] to have a greater percentage of customers who [disagree] with their damage estimates and [feel] their final settlement [is] too small.”
THE RIGHT COVERAGE
The best homeowners insurance policy is the one that offers the coverage you need. While your mortgage lender may require you to carry only 80% of replacement value, you probably will want more than that. But it also isn’t worthwhile to buy too much coverage. The rule of thumb here is to buy “enough insurance to cover the labor and materials to completely rebuild your home,” making “sure inflation is factored in.”
ADD-ONS TO COVER ASSETS
In addition, you should think about buying various options and add-on to cover your assets and to cover certain disastrous events. This, of course, will cost you more each month, but it can provide some peace of mind when you know you’re covered for all contingencies. Some of the options and add-on you should consider (again according to Consumer Reports) include ones to cover
- Sewer backup
- Earthquake, hail, and windstorm
- Extra replacement costs
- Contents replacement
- Valuables loss
FLOOD INSURANCE FOR LOW-RISK AREAS
Insurance experts also recommend that you add flood insurance to your homeowners insurance policy in Metro Detroit Michigan even if you live in a low to moderate risk area. The reason they advise this is that “about a quarter of flood claims come from low to moderate-risk areas,” so “it’s a worthwhile expense for many people.”
Finally, in addition to finding and building the best homeowners insurance policy in Metro Detroit Michigan for your needs, you will also want to find ways to lower your premium. You can do this by bundling coverage, raising your deductible, making home improvements, and buying a home that presents little risk for insurers. And your local real estate agent can definitely assist you in doing those last two things.