As soon as we started looking for a home with a real estate agent, she advised me to get preliminary quotes from several insurance companies so we would be able to move quickly once we went into escrow. If you’re getting a loan, you can’t close the loan without insurance in place, and the first year’s premium will be paid through your escrow company in advance.
How to Research Homeowner’s Insurance
The initial research is simple. Follow these steps to accomplish the task in a few hours:
- Approximate the average price, size, and age of the homes you’re looking at. In our area, that was about 1500 square feet and built in 1950.
- Compile a list of potential insurance companies. Ask friends and relatives who own homes for recommendations.
- Check your state insurance commissioner’s website, online review sites, and the Better Business Bureau’s site for ratings for each prospective insurer for homeowners and auto insurance (if you drive.) A combined policy will save you a few hundred dollars every year.
- Visit the websites of three or four your top choices for online quotes. It will take a few minutes to complete the forms on each site. Most should supply you with an instant quote. For your auto quote, base your decision on the level of coverage you’ll need after you move into the home, not the lower level you most likely have now.
- Contact your current auto insurance agent for a quote. You may get an additional discount for being an existing customer.
How to Choose an Insurer
Although you’re more likely to use your auto insurance, I decided to choose my insurance based on the best homeowner’s coverage because it has a much higher value. On the insurance websites, you can run different scenarios to adjust your cost. You can’t change the value of your home – that’s based on a formula – but you can adjust the deductible, the personal liability coverage, and a few other factors. I chose a $2500 deductible and a million dollar personal liability rider.
I narrowed it down to two possibilities, one of which is my current auto insurance company. When we went into escrow, I called each for a specific quote for the specific property. The quote I received was actually lower than the online quote, despite the home being larger than my estimate.
When making my decision, I relied on three primary factors:
- Reputation – Does the company have a good BBB rating and insurance commission rating?
- Coverage – Does the homeowner’s policy include the coverage I require?
- Price – I wouldn’t automatically choose the cheapest, but I wouldn’t choose the most expensive if other factors were equal.
Once you have your quote, get the agent’s name, phone number, fax number, and any other information you need to complete the escrow form and submit it as quickly as possible. Our escrow company requires the information at least 10 days before closing to avoid delays.