When comparing homeowners insurance, price matters, but it shouldn’t be the only factor. Coverage limits, deductibles, exclusions, endorsements, and discounts can all affect the value and protection a policy provides.
Check out our guide below for proactive steps to take to protect your home.
Questions? Reach out to one of our knowledgeable insurance agents. We’re eager to set you up with the right coverage and rate!
We spoke with Chris Walton, Agency Manager at Cornerstone Insurance Agency, about what homeowners should look for when comparing quotes and how they can potentially save without sacrificing important coverage.
Q: What should homeowners consider when comparing insurance quotes beyond simply choosing the lowest price?
Chris: Price is certainly important, especially with the rising cost of goods and services. However, it shouldn’t be the only factor you consider.
Make sure the policy provides enough coverage to rebuild your home if something happens and understand your deductibles and how much you would be responsible for paying out of pocket in the event of a covered loss.
It’s also important to understand what is excluded from the policy and whether additional coverage may be appropriate. For example, flood insurance is generally separate from a standard homeowners policy.
You may also want to consider the insurance carrier and its claims service. I do caution homeowners when looking at company reviews, because people are generally more likely to post about a negative experience than a positive one.
Ultimately, it’s about finding the right balance between what you’re paying and the coverage and value you’re receiving.
Q: Why can two insurance policies have very different premiums, even when they appear to offer similar coverage?
Chris: We see this quite often. At first glance, two policies may look very similar, but there can be important differences in coverage limits, deductibles, and endorsements.
Deductibles are a major factor. If you’re willing to take on more financial responsibility in the event of a claim, you may have a lower premium. On the other hand, adding endorsements or broader coverage can increase the cost of a policy.
A lower premium doesn’t necessarily mean reduced coverage. Sometimes it simply means certain coverage options or endorsements haven’t been selected—either by the homeowner or because they weren’t discussed during the quoting process.
That’s why it’s important to look beyond the premium and understand exactly what each policy includes.
Q: What coverage limits should homeowners pay particular attention to when comparing quotes?
Chris: Homeowners should pay close attention to the dwelling coverage and make sure it is appropriate for the cost to rebuild the home. You should also review other coverage limits, including personal property and additional living expenses.
The coverage amount should reflect the potential cost of rebuilding the home, not simply what you paid for it or what you believe you could sell it for.
It’s also important to review any sublimit or specific limits that apply to certain types of property or losses. If you’re unsure what your coverage limits mean, talk with your insurance agent about your specific policy and whether additional coverage may be appropriate.
Q: How should homeowners compare deductibles when reviewing different insurance quotes?
Chris: Deductibles are an important part of the overall cost of an insurance policy. A higher deductible can sometimes result in a lower premium, but it also means taking on more financial responsibility if a covered loss occurs.
For example, if you’re comparing a $2,500 deductible to a $5,000 deductible, don’t just look at the difference in premium. Consider whether the savings are significant enough to justify the additional out-of-pocket expense if you have a claim.
The right deductible depends on what you’re comfortable paying if something happens. That’s why homeowners should discuss different deductible options with their insurance agent rather than automatically choosing the lowest premium.
Q: What role do endorsements play when comparing homeowners insurance policies?
Chris: Endorsements can add specific coverage to a homeowners policy and are another reason two policies that appear similar may have different premiums.
When comparing quotes, look at which endorsements are included and understand what additional protection they provide. A policy with more endorsements may cost more, but it may also provide coverage that isn’t included in a more basic policy.
The important thing is to understand what you’re paying for and determine whether the additional coverage makes sense for your situation.
Q: What advice would you give a homeowner who wants to save money on insurance without sacrificing important coverage?
Chris: Start by asking about available discounts. One of the biggest opportunities we see is bundling your home and auto insurance together. The discount varies by carrier, but bundling can be a significant way to reduce your overall insurance costs.
You should also ask whether your home has protective devices that may qualify for discounts, such as monitored alarm systems and water shutoff devices.
For example, a water shutoff device can detect continuous water flow caused by a broken pipe and automatically shut off the water. This can help prevent a small problem from becoming a much larger water damage claim. Some insurance carriers may also offer discounts for certain protective devices.
Another option is to review your deductible. If you currently have a $2,500 deductible, ask what your premium would be with a $5,000 deductible. If the savings are minimal, taking on additional financial responsibility may not be worthwhile. If the savings are significant, it may be an option worth considering based on your financial situation.
The key is to understand your options, compare the potential savings, and choose a deductible you would be comfortable paying if you experienced a covered loss.
Look Beyond the Bottom Line
When comparing homeowners insurance, don’t stop at the premium. Take the time to understand the coverage limits, deductibles, exclusions, endorsements, and discounts included in each quote.
Have questions about your homeowners insurance options? Contact our team at Cornerstone Insurance Agency to review your coverage and explore your options.
This article is for informational purposes only. You should not act based on this information without first consulting with your insurance agent; if you would like a quote from a Cornerstone Insurance Agency licensed agent, contact us. We disclaim all liability for actions taken or not taken by you based on the contents of this article which is provided “as is.” Cornerstone makes no representation that this content is error-free.