The key to avoid over-paying on your homeowners insurance is to shop around once a year, usually 60 to 90 days before your renewal.
Insurance companies will often attractively price their initial policy quote with the intention to raise prices year-over-year.
Here’s how you can shop around with confidence in 3 Simple Steps:
Step 1: Shop online with “InsurTechs”
In the past 3 years, venture investors have poured over $20 billion in the overall insurance space and empowering companies using technology to disrupt the insurance market. These companies have been called InsurTechs.
A number of the new insurance companies are flush with ventured backed dollars and it’s important for them to acquire customers to demonstrate their growth, even if they operate unprofitably.
That means those investment dollars can sometimes subsidize the premiums for early-adopting customers.
Most new insurance companies are making it really easy to obtain an accurate rate quote online, which is really convenient.
It will take you about 10 minutes to compare all 3.
Step 2: Compare with Traditional Insures
Compared with tech-forward insurance startups, traditional insurers like State Farm, Allstate, Farmers, and Liberty have a legacy structure that can result in a higher operation cost, but their advantage is economies of scale.
We suggest starting with the insurance company that covers your automobile. Or if you already have an insurance agent, reach out to him or her.
Since you’ve already easily compared with the InsurTechs, you don’t have to worry if the insurance agent is over-charging because you’ll be ready to compare the policy and it’s premium.
Often homeowners think that tech-forward insurance companies like Hippo are automatically going to have the lowest premium just because they’re a tech-enabled insurance company. But they could be wrong. Often larger insurance companies can offer lower premiums because of their scale, but it may just require some negotiation.
Step 3: Compare Policy Details
And of course there is the policy contents itself.
You will want to go through the homeowners insurance and make sure you’re comparing Apples-to-Apples.
Standard homeowners insurance policies generally include six types of coverage. Here they are at a glance:
|Type||What it Covers||Standard Amount|
|Personal Liability||Pays if you injure someone or cause property damage unintentionally||$100,000 to $500,000|
|Dwelling||Covers damage to your home and improvements||100% rebuild|
|Other Structures||Covers stand-along structures, such as a fence or shed||10% of dwelling coverage|
|Personal Property||Pays to repair or replace belongings that are stolen or damaged in a covered event||50% to 70% of the value|
|Loss of use||Helps pay temporary living expenses while your home is being repaired||20% of dwelling coverage|
|Medical payments||Pays to treat someone injured on your property||$1,000 to $5,000|