Should I be switching my home insurance? If that’s the question you’re asking, we’d encourage you to do a comparison of what you have with some of the other options.
Yes, you could push that home renewal back into the drawer or ignore that renewal email but taking the time to do a comparison gives you benefits. Best case, you’ll find out if you can save some good money by switching. Worst case, you won’t need to switch insurers. Either way, and this is important, you’ll know how you’re covered and can make changes if you want.
What should I look out for when reviewing my home insurance quotes? A good question. This write-up is for you, for people who don’t want to spend tons of time but do want to know what to look out for when comparing.
Based on our experience doing a lot of home insurance comparisons here in Oregon, here are some of the basics and also things people often miss.
Find Your Current Insurance Home:
You can get this through your online insurance account and downloading your current “Declarations Page” or “Policy Summary.” Or, you can call the agent or insurer and ask that they email it to you. Without this, you’ll have no idea what you’re currently paying for.
Lookouts When Comparing Home Insurance:
Double-check the main information about your home.
This information matters a lot because it is used to establish an estimated replacement cost for your home. Sometimes the info can be wrong. Unless you love it so much(!), you don’t need to go into the weeds because the goal is to catch major errors, errors that could lead to under or over insurance.
For instance, are the stories, exterior siding, and square footage correct? Is there a basement? How many bathrooms are there? What’s the roof age?
Look out for major changes you have made to the home, especially if you’ve added square footage or made custom upgrades to bathrooms or kitchens.
Here in Oregon, those upgrades tend to be added decks, skylights, roof replacements, solar panels, or separate outbuildings. (Don’t worry, you can always review more details later if needed.)
Compare your current coverages to the quoted coverages.
When dealing with something as stimulating as insurance, it can be tempting to neglect this step, thinking well, “all home policies are the same.” But that is far from the truth. Which coverages to look out for?
Compare the Basics.
These are the easiest and are listed together on every home policy here in Oregon. Compare the Dwelling, the Other Structures, the Personal Property, Loss of Use, and Liability. Note any major differences.
Compare the Deductible.
This choice can have a big effect both on the policy, the cost, and whether or not you decide to file a claim down the road.
Compare the Add-On’s (also known as “endorsements”).
This is by far the most common miss that I see. They can’t matter that much can they? They’re on the second page! 🙂
These addon’s cover things like damages from water backing up, matching siding and roofing, or damage from long-term hidden leaks. You may regret not having these in the event of a claim; or, if saving money is the most important thing, you’ll want to be sure to ask the agent to remove coverages you don’t want.
You’ll find these usually listed towards the bottom of the first page or on the second page of the “Declarations” (those two or three pages that list out the coverages and pricing). If you’re looking at a digital version, it may be listed under something like “Optional Coverages” or “Endorsements.”
Look out for Replacement Cost coverage, on the roof especially.
You want everything covered at replacement cost. The home and your stuff.
This means that you can expect the company to pay the full replacement cost for your repairs or belongings when you replace them. (This is usually on a like-quality/like-kind basis and goes up to the limits of the policy.)
I say pay special attention to the roof because I’m seeing more agencies quote policies that have a roof covered only at Actual Cash Value. (Tricky!) This could be a big step down in coverage from your current policy, and it matters. How so?
If a wind-storm damaged your roof, the insurer would compensate you depending on the roof’s age rather than covering the cost of a new one. You could end up paying thousands more than if you had Replacement Cost. (And that matching roofing endorsement would help ensure they replace more than just the damaged section!)
Look for the Extended Replacement Cost amount.
Sometimes called “Additional Replacement Cost,” this coverage is often buried in the policy details but it matters! What if there’s a major loss and the home ends up costing more than everyone thought to rebuild? If you have it, this coverage adds additional cushion in the policy, usually 20%-100%. Sometimes, I see a policy with none.
This coverage can especially matter in areas that experience a regional loss, where the costs of rebuilding can go up considerably because of a demand spike. These losses would be things like windstorms or wildfires (go here for Oregon Wildfire Maps). The cost is usually minimal, but the coverage difference can be $100s of thousands.
Consider Earthquake Coverage.
Earthquake coverage isn’t legally required here in Oregon. And your mortgage lender does not require it either. But, your home is probably one of your bigger assets and you may want to revisit this. (Go here for the Oregonian’s map of earthquakes in the last 30 days)
Our part of the state here in Washington County is in the second of three major risk zones in Oregon. Also, parts of Hillsboro, Beaverton, Forest Grove, and Banks are on more hilly terrain or nearer wetlands where earthquake risks can be more significant. (Visit Assessing Earthquake Risk in Oregon if you want to dive deep.)
Look out for high value property items.
For instance, if you have jewelry, firearms, special collections, or lots of tools, you’ll want to double-check these limits (each carrier is different). Perhaps you already have scheduled an engagement ring onto your home policy, you’ll want to take that into account on the new policy.
Finally, Compare the Price
We put this last not because it’s least important but because without knowing the above details, the price doesn’t tell you much. It’d be like going to the Hillsboro Farmers’ Market and being offered two boxes of fruit, one for $25 and one for $100. Which is the better deal? Well, what is in the box?!
Price is critical, yes; and you also need to know what’s in that box!
In Sum
If you’re going to compare insurance policies looking for better pricing, doing a reasonable comparison will help you find the best value for your situation.
Looking over the past few clients who decided to move to one of our carriers. One saved $637, another $173, another $269, another $804, enough that they were able to now get the earthquake coverage they wanted. Those examples are for similar or stronger coverages and doesn’t include what they saved on the cars and umbrella. Not everyone switches, but many do.
A decent comparison does good things. It will help you know what you have, maybe discover unwanted gaps (like wrong square footage). It will help you avoid being taken by a lowball quoter or a buy-it-all salescheez. It may help you save significant money. It will help you know what you’re paying for.
Let us know if you’d like a car, home, and umbrella comparison.
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