Shopping Tips for Property Insurance

The most important tip: Think rebuilding cost, not real estate value, when insuring your home. If your home is severely damaged or destroyed, it may cost more to rebuild it than its current sales price.

1. Insure for the rebuilding cost, not the real estate value.
   Real estate goes up and down, while building costs may not fluctuate as widely. You can check in your area for the price range per square foot of new construction or use one of the online building estimator tools. (Suggestion: Type how to estimate building costs in the search field.) You’ll want to purchase enough insurance to completely rebuild your home.
2. Accurately estimate your home’s contents by doing a home inventory.
   Remember to include your furniture, electronics, appliances and other contents so you can replace all your belongings if you suffer a major loss. Many people underestimate how much they own, and the Insurance Information Institute has free software to help you create an accurate home inventory. And, having an accurate inventory will help you settle claims promptly. The free software is available at www.knowyourstuff.org.
   
3.  Don’t select an insurer on price alone.
   Check the company’s reputation for service by asking people you know for recommendations. You’ll want to send your business to a company that is known for answering questions promptly and handling claims properly and fairly. You should also check on the company’s financial rating by checking with ratings organization. This information is often available on the company’s Website as well.
4. To save money, take the highest deductible you can afford.
   The higher the deductible, the lower your premium. Since most people file a claim only every eight to 10 years, you will save money over time and preserve your insurance for when it’s really needed.
5. Ask about policy exclusions, available discounts and additional coverage. Make sure you understand what is covered and what is not. Homeowner insurance policies do not cover flood damage. Some have exclusions for sinkhole coverage, and you may want to include this protection for an additional premium. There is also additional coverage you may wish to purchase to rebuild your home to the current building code, since new construction must comply with stronger codes. You earn discounts for security systems, some upgrades, wind-resistant shutters, and other improvements and safety features.