Buying House Insurance

Buying house insurance that is adequate and appropriate requires much serious decision making on the part of the homeowner. It is a decision that can have consequences of all sorts for the homeowner for a very long time. It requires much thought and a good insurance agent.

Homeowners need to get information about all the different kinds of house insurance available to them, investigate the companies that sell the policies, and then make a choice about which one to buy.  This is all a part of the process of being frugal with home insurance. The contents of the policy are extremely important, and the relationship with the insurance agent is also a matter for great consideration.

Forms of Insurance

There are many different forms of house insurance available on the market and from a fairly large number of insurance carriers. They are all, however, governed by the Insurance Services Office (ISO) which instituted the standardized policies as a way to make things easier and safer for both customers and carriers. The ISO has designated homeowners policies as HO-1, HO-2, Ho-3 and upwards to address every type of situation from condominium owners, to renters, to owners of old, historic buildings.

The ISO sets standards for the levels of coverage that insurance agencies can offer. They are HO1, the Basic or Standard Form Homeowner Policy which provides coverage against a list of eleven perils which include windstorm, fire, hail, lightning, vandalism or malicious mischief, riots and civil commotion, theft, and damage from vehicles or aircraft, explosions, and personal liability.

There are two extended versions of the homeowners policy, the HO2 the Broad Form Homeowner Policy and HO3 the Special Form Homeowner Policy. The HO2 covers an additional six perils or so compared to the Basic form and is called a named perils policy. The HO3 is the most inclusive policy available and is somewhat different to the others in that it covers all perils that it does not explicitly list as excluded,

Form HO4 is the Tenant's insurance form that covers renters, and HO6 is specific to condominium owners.

Buying a Policy

Armed with this information, the homeowner should now meet with an agent. There is rating information on the internet from companies like A. M. Best who grade insurance carriers on their financial health and their estimated ability to pay claims within a span of up to thirty-six months.

After this it would be a good idea to ask someone to recommend an agent that they know well. The agent will need certain information in order to give a first quote. This would be information about the value of the house, the area in which the condominium is located, or the size of the apartment, and so on. If the homeowner has already prepared an inventory of the valuables and possessions that will be insured it will help the agent even further. However, the homeowner should never agree to a quote, sign an insurance policy agreement, or pay an agent until the agent the homeowner had met the agent and had a face to face meeting. Nor should the homeowner do any of this until the agent has conducted a visit to and examination of the property that is being insured.

The agent and the homeowner will discuss limits and deductibles before settling on a premium. The homeowner should decide how high the limits of the policy should be, and most of this will be determined by the value of the dwelling. The liability limit will be affected by other structures on the property, such as a swimming pool. If the homeowner has also decided what deductible is desirable, the agent can give an appropriate quote for use in buying house insurance.

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