Avoid These Home Insurance Mistakes

Getting the best deal on a home insurance policy involves more than just finding a low monthly payment, as many of the respondents in a new Consumer Reports survey say they found out the hard way.

Consumer Reports recently compiled insurance company ratings following a national survey of insured homeowners. The company said it based its findings on responses from 9,905 of those surveyed who filed claims from January 2010 to June 2013.

This is good, since it’s easy to like your insurance company if you’ve never had to make a claim.

Consumer Reports said that Amica, USAA, and Auto-Owners emerged as among the top picks among the 14 companies it rated. But what makes a policy good? And how can you get the best price on truly good insurance?

Paying for home insurance is a necessary evil; the kind of thing you don’t think too much about until that policy is all that stands between you and financial ruin. Or homelessness. Consumer Reports said that homeowners can really help themselves by facing possible outcome ahead of time, starting their choice of insurer.

You can start by picking one of the top-rated companies based on the experience other homeowners’ report having when making a claim.

Second, you should avoid a big mistake many homeowners make in an effort to save on premiums: being underinsured. Almost one in ten respondents to the Consumer Reports survey said that they found themselves in that predicament when it came time to file a claim.

Instead, consider the option of reducing your premium by taking a higher deductible, on a policy that offers adequate coverage for the threats your home faces. Work with your insurance company by having them quote on various levels of deductibles, until you find the “sweet spot”. Just don’t skimp on coverage.

Another way to save money is to buy home and auto insurance from the same company. Companies will usually offer a substantial discount when you do this.

In the long run, the best way to save on home insurance is to be prepared. One way you do this is by minimizing the risks your home faces, based on the types of threats that are prevalent in your area.

For instance, if you’re at risk of damage from winter storms, concentrate on reducing the risk posed by accumulations of ice and snow. Trim the branches of any trees standing near your house, keep gutters clean and insure that water cannot accumulate in or near your house.

You should also prepare for that future claim by rigorously documenting your valuables: take video, and get current appraisals for any antiques or collectables.

Consumer Reports also suggests that you shop periodically for the best policy, and the best deal. Remember that today’s top-rated insurer can become tomorrow’s bottom-rated one – and that companies do adjust their pricing strategies from time to time. Even if you’re pleased with your current insurance, it never hurts to shop around come renewal time.