Aside from becoming a father and reaching a certain age milestone (which I won't disclose), I recently joined another club: I became a homeowner. I have written a number blogs geared towards homeowners where I have provided tips about the insurance claim process and suggestions on what to do in various situations. While I know quite a bit about insurance companies and the homeowner policies they issue, I didn't rely on this familiarity when buying a policy to insure my home. I did some homework before selecting an insurer, and my advice to all homeowners is to do the same.
In California, the Department of Insurance (DOI) website provides some very useful tools for consumers, especially homeowners. There is a consumer guide to shopping for homeowners insurance. According to the DOI, the top 3 homeowners insurance myths are:
- The best price is the best deal.
- All policies are created equal.
- It's impossible to compare homeowners policies quickly and effectively.
In my experience and doing the research, I would have to agree that the above are certainly myths. Buying a homeowner policy should be done carefully and not be based necessarily on convenience and cost. Many homeowners receive discounts if they insure their homes and autos with the same insurer. The discount should not be the reason alone to select an insurance company. Also, buying insurance based on commercials we see on television is not the way to go either.
While it is unlikely for homeowners to have access to policies from insurance companies to review beforehand or to be calling multiple agents to ask questions, another tool is available from the DOI I find useful. It is aptly named the Homeowners Coverage Comparison Tool. Using this tool, one can select from virtually all insurance companies that issue policies in California and compare coverages and differences between the policies. You can select up to three insurance companies at a time and compare them side by side.
The responsibilities associated with owning a home can be intimidating. The same goes with buying insurance. We are all better off by being more informed than not.