Save Time and buy Home/Condo/Renter Insurance with Confidence (Test)

Save Time and buy Home/Condo/Renter Insurance with Confidence (Test)

Insurance  should be a source of peace and strength, not confusion and anxiety. A  little preparation goes a long way to saving you time, money and  headaches when buying property insurance.

TL;DR

If you are short on time, just read the headings and then use this Insurance Buyer’s Spreadsheet to optimize your insurance search.


Shopping  for insurance when you are buying a home or moving apartments can be a  huge source of stress and frustration. If you are like most people, it’s  hard to know even where to begin. A light Google search quickly turns  into a cluttered mess of industry jargon, endless confusing forms,  offers you can’t differentiate between, and ruthless ad retargeting.  Most of those ads will feature cute animals, sports stars, or promises  of cheap prices (how can they all promise to offer you a cheaper  price?), sothey aren’t super helpful for determining who is actually  offering what you need. You end up just choosing the cheapest offer, or  going with whoever your friends or parents went with.

The 3 Best Practices for Buying with Confidence

It  does not have to be that way. Insurance is a pretty standardized  product — most policies the big insurers will sell you are very similar,  with fairly standard pricing. But that does not mean that every offer  you get will be the same. Usually your cheapest offer will have a huge  hole in coverage, and your most expensive is offering you way more than  you need. To buy with confidence, do these 3 things:

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#1: Make sure you provide the same information to each insurer.

Every  insurance company has different forms, asks different questions, and  has different back-end data sources. This often results in you  unintentionally providing different insurers with different information.  The problem is, it is very hard to know what you need to have ready  going in to ask for a quote — it’s not something you do every day.

Problem Solved: use our Insurance Buyer’s Spreadsheet to be ready.

The general list of information you should have ready is:

  1. Details on property including your Mortgage Company details.
  2. Your current or old insurance policy documents, if you have one.
  3. A list of your top 10 most expensive things. This  is typically jewelry, electronics, art, specialist sports equipment,  home office equipment — you get the idea. All standard policies limit  the amount they will pay for such things and the kinds of loss or damage  they will pay for. Most online quote forms will ask about the value of  such things, and any good agent will ask so they can offer you what’s  called a “Rider” or “Floater” — i.e. an up-sell that will protect these  items properly (you should at least get a quote!). If you have anything  worth over $1,000, consider telling the insurer about it. For jewelry or  art, you may need appraisals or receipts to substantiate values, so if  you have them it is worth getting them together in advance.
  4. An idea about how much the rest of your stuff would cost to replace after those top 10 items, or at least how much you would want to be  paid if you lost everything in a fire. This will be your “Personal  Property Limit.” Many people routinely underestimate this number, and  one of the easiest ways for insurers to win the sale with a lower price  is by shortchanging this amount.

If  you use this bank of information to fill in quote forms or provide it  to agents, you should get offers that are all starting with the same  inputs.


#2: Get at least 3 quotes

This  is an important best practice. If you are armed with the standardized  information from #1 above, then you are ready to breeze through online  forms and agent’s questions.

Can’t decide who to pick? Here’s a list of big players in the market you could consider. Ask a friend or family  member who they are with and put that company on the list. You could  also consider some of the start-ups in this space, such as Hippo,  Lemonade and Jetty. They are all backed by long established financial  partners, and State Governments have licensed and vetted them.

#3: Make an apples-to-apples comparison

Why  is one offer so much more expensive (or cheaper!) than the others? If  two offers are basically the same price, how do you chose between them?  Making sense of the offers you have in hand is the hardest part, and  unfortunately it is the part insurance companies are the worst at helping you with. Instead they ruthlessly retarget you with ads or  bombard you with calls until you get fed up and choose one.

Fortunately you can make and apples-to-apples comparison and make an educated, confident choice. Our Insurance Buyer’s Checklist will make sure you are looking at the right variables to check which offer works best for you.

The Checklist is a spreadsheet that walks you through evaluating:

  1. Building Property Limit
    This  is the maximum your insurer will pay to replace your building if it  burned down or you had another type of “total loss”. It is important to  make sure the numbers match on your quotes. Differences there will have a  big impact on cover quality and price.
    Note for Condo Owners: this is typically “walls in” coverage, since your HOA has a policy for  the main building that covers things like roofs etc, but may change if  your HOA has a more comprehensive policy that covers some things for  you. Ask them about the type of policy they have.
    Note for Renters: Even renters policies provide some coverage for property features that you solely own such as built ins you installed.
  2. Personal Property (Stuff) Limit
    If  you were specific with insurers about how much you wanted, it should  more or less be the same unless they have minimums (for instance, some  just set your PP limit at 50% of the building’s limit). Your other  limits such as “Loss of Use” (i.e. paying for a temporary place if a  loss means you need to move for a while) will normally be relative to  this number.
  3. Loss Settlement Type — “ACV” or Replacement Cost?
    A  big difference in premiums may be due to a difference in the “Loss  Settlement Type.” This is essentially how insurers decide how much to  pay you. If you have “Replacement Cost”, they’ll pay to rebuild your  house (up to the limit) or replace your stuff retail, without deductions  for depreciation. If you have “Actual Cash Value” or “Depreciated”  coverage, you’ll get the amount you could replace your stuff for through  Craigslist. Many cheap policies use this so watch out.
  4. Deductibles
    For an apples to apples comparison, the key is to make sure each company offers you the same value.
  5. Liability Limit
    This  coverage protects you if you are sued for injuries or damage resulting  from your negligence. The key here is to make sure they are all offering  the same amount. In general Liability coverage is cheap, and won’t make  much difference to the overall price.
  6. Coverage for your expensive items
    If  all the big limits noted on your quote are the same, the next thing to  check is how your specific expensive items will be covered. First thing  to check is if you were offered a “Floater” or “Rider” that provides  quality coverage for the amount you need. If you weren’t offered one, it  is worth asking the agent how you will be covered for them. Computers  are a great example — many policies cover them up to $5,000 per loss,  but only on your own property or if they are out for repair. Some don’t  cover them at all. Some provide great cover. It’s worth knowing, since  these items will be your most likely reasons to claim, and it’s worth  knowing what you are covered for.
  7. Service Records
    Insurance company service is all pretty similar — JD Power does an annual ranking.  But even so, among the companies they rank, no companies are more than  about 10% better or worse than the average. Another way of looking at it  is how many justified complaints are filed against them. In California  (where we are building Goodcover), the state publishes a handy ranking (companies with fewer complaints are at the top).
  8. Price
    If you have gone through and are comparing insurance offers apples to apples, then now it’s time to consider price.

Conclusion

If  you have the info you need all together, get at least 3 quotes, and  compare insurance offers apples to apples, you’ve done what you can to  do make sure know what you’re buying, and that it will perform as  expected should you need it!

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Goodcover Insurance Solutions, LLC (Goodcover) is an insurance agency licensed to sell property-casualty insurance products. Goodcover will receive compensation from insurance carrier partners for such sales. Refer to the Legal Notices section for additional information.

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