3 Key Ways to Compare Home Contents Insurance

When considering homeowners insurance one should always look to find the best value.  Shopping around a comparing premium prices is always worthwhile exercise.  Rarely will one find the cheapest insurance on the first try. And, the only way to be sure is to compare with other insurance companies. 

A very important component of a homeowner’s insurance policy is the contents, or property, insurance.  This is the part of the policy that covers what is in your home, as opposed to the structure itself.  This includes things like furniture, appliances, clothing, and so forth.  There are some very important issues of which to be aware when comparing home contents insurance.

First of all, it is very possible, if not likely, that you will have some property that will not automatically be covered by the typical policy.  For instance, do you have any expensive jewelry, coins, artwork, furs, or anything like this?  Very often a special policy rider will have to be added to receive coverage for these types of items.  So, when comparing insurance look at how these kinds of property are handled.

Next, one should see if replacement value or cash value is what is being insured.  Replacement value is how much it would cost to replace the item right now.  Say, you have a dishwasher that is 10 years old.  The cash value of that appliance right now is far less than the price originally paid for it.  Insurance for replacement value would cover the cost of replacing that item as opposed to simply providing for its current cash value.

Please understand that for many homeowner’s insurance policies it is typical to provide cash value insurance.  Replacement value insurance must be specifically requested.  And, as you might imagine, is more epxpensive.

Finally, be sure to realize that home content insurance is only one piece of the homeowner’s insurance  puzzle.  Other parts of the insurance involve insuring the structure itself (where the replacement vs. cash value issue comes in too) and liability insurance. Liability insurance protects you in case of injury to someone who is on your property.  The point is, that just because you are pleased with one portion of a policies coverage (such as home contents) you may much prefer how another company handles another part of the homeowner’s package (say the liability insurance).  Just know that your comparison needs to be of the entire homeowner’s policy, not just selected portions of it.