How to find affordable and quality homeowners insurance

The Insurance Information Institute indicates national average single family home insurance cost can range approximately between $600-$1600 per year, but this does not apply to statistical outliers and above or below average risk factors. In such cases, a home owners insurance policy may run into the thousands of dollars depending on the specific size, location, owners and features of the home.

Finding affordable and quality homeowners insurance is important to home owners because of the financial security a homeowners insurance policy provides. Since a home is often a very large asset, protecting that asset by shopping for the right insurance policy and  insurance company is as important as finding a cost effective policy. Below are steps to help you find the best homeowners insurance policy for you, your home and/or your family.

Step 1: Determine insurance needs

Homeowners insurance needs vary from household to household and should take into account the individual preferences and needs of the home owner. For example, if a home owner has a particularly expensive set of collectible items it is a good idea to insure those items. Being able to sit down or verify what your policy covers in and of itself may not only be an insurance need, but a requirement to find affordable and quality homeowners insurance. Some insurance needs to consider are 1) budget, 2) coverage necessities, 3) accessibility of insurer and 4) your relationship with the homeowners insurance provider.

Step 2: Identify insurance listings

Insurance company listings can be obtained through the National Association of Insurance Commissioners (NAIC) through which state commissioners, and registered property and casualty insurers can be identified. State departments of consumer affairs and insurance may also provide listings and/or recommended lists of licensed insurers. State licensure information can also be confirmed through these organizations.

Step 3: Review consumer reports

Consumer reports and ratings can be obtained in a number of places and include friends and neighbors, ratings agencies, consumer affairs organizations and independent consumer report suppliers. Consumer affairs organizations such as the U.S. Federal Trade Commission, State Departments of Consumer Affairs and Consumer Affairs organizations all offer tips and/or information on insurers. Ratings agencies such as JD Power and Associates, Standard and Poor’s and AM Best provide financial information and ratings on insurance companies.

Step 4: Obtain draft policies and insurance quotes

After you have selected 2-4 homeowners insurance providers you can then take the next step of investigating their insurance coverage to see if it suits your needs and requirements. This can be accomplished by contacting the insurance provider and either arranging for draft policies to be sent via email or by visiting the insurer in person to go over potential policies and coverage.

Step 5: Study and compare selected insurers

A last step in finding affordable and quality homeowners insurance is to evaluate insurers and the homeowners insurance policies they provide. Creating a checklist of features such as price, convenience, company solvency, reputation and so forth can be useful. After creating the checklist, assigning a score between 1-5 for each of the factors on the list can provide you with totals with which to compare home insurers. Other factors such as multi-line discounts through existing insurers may also weigh in on an homeowners insurance assessment.

A.W. Berry -HomeownersInsurance.org Expert A.W. Berry is a published personal finance writer with an interest in all kinds of money matters. His professional background in finance, marketing and sales directs his reporting to pertinent local issues.