Evaluating Homeowners’ Insurance Carriers and Coverage

The holiday season is a time of joy, reflection, and preparing for the year ahead. It’s also the perfect opportunity to review important aspects of your financial life, including your homeowners’ insurance. With winter weather and festive gatherings around the corner, ensuring your home and assets are well-protected should be at the top of your to-do list.

The property and casualty insurance business has faced challenges recently, from natural disasters to rising rebuilding costs. These issues have driven up home insurance rates, prompting many homeowners to reassess their policies. By taking a proactive approach, you can ensure you have the right coverage at the best value.

Reviewing Your Current Home Insurance Policy and Coverage Amounts

If your insurance premiums have increased so much that you are considering changing providers, here are some steps you can follow before contacting potential insurers. These steps will help confirm that you are pricing and buying the correct types and amounts of coverage.

If your premiums have skyrocketed, it may be time to explore other options. Start with these steps to confirm you’re purchasing the correct types and amounts of coverage:

1. Assess your current claims situation. Is your home in an area more prone to fires or storms? Have you had claims against your policy recently? Identifying potential red flags helps when engaging with new carriers.
2. Estimate your home’s value. Websites like Zillow or Redfin can offer starting points, but their algorithms may not reflect local market nuances or home improvements. Consider consulting a local real estate expert for a more accurate valuation.
3. Check rebuilding costs. Contact builders or review property tax records to estimate the cost of replacing your home, factoring in current construction rates.
4. Review your policy type. Is your current policy (e.g., HO-3 or HO-5) sufficient to replace your home and belongings? Replacement value coverage often provides more comprehensive protection. HO-3 policies cover the house for named perils and reimburse you for the actual cash value of the destroyed item, and HO-5 policies cover all perils and reimburse the replacement cost of the destroyed item.
5. Consider additional risks. HO-3 and HO-5 policies don’t cover earthquakes or floods, so if you live in an earthquake—or flood-prone area, you should work to get separate quotes—usually from different organizations—to insure these risks.
6. Evaluate liability coverage. Do you have enough property coverage? Is your liability coverage adequate to protect your assets if a claim should occur?
7. Explore bundling options. Combining home, auto, and umbrella policies with a single carrier can simplify your coverage and can potentially save you money.

Evaluating New Home Insurance Carriers

Once you have reviewed your current policy, the next step is identifying potential homeowners’ insurance carriers to contact. These resources could be helpful:

1. Talk to your neighbors. Holiday gatherings can be a great time to ask friends about their experiences with their insurers. Have their rates increased? How was the claims process?
2. Review Consumer Reports rankings. These can shed light on which insurers provide excellent claims experiences—often, the lesser-known companies excel.
3. Contact insurance companies directly. If you hear about a highly recommended carrier, don’t hesitate to reach out for a quote.
4. Work with a local broker. Licensed brokers can offer personalized advice and connect you with the best options tailored to your needs.

A New Year’s Resolution for Asset Protection

The holidays are about protecting what matters most, including your home and assets. As the season of giving transitions to the new year, now is the ideal time to ensure your financial security. At Mission Wealth, we’re here to help you review your homeowners’ insurance as part of a comprehensive asset protection strategy.

Mission Wealth clients can schedule a complimentary asset protection review today.

If you are not yet a client of Mission Wealth, let’s work together to safeguard your peace of mind for the year ahead. Call us today for a complimentary consultation.