What to look for in a home insurance policy to get the best deal?

Question

Hey Bp family,

I am looking to get some insight on what to look for in a home insurance policy for a duplex. I want to make sure i am well covered while getting the best deal without over paying for things I might not need. I am in the NJ area if that helps or makes a difference.

Any insight is appreciated.

Thanks,

Brian

Derek Lacy · Answer

I would actually turn the question on you a bit.  Too much focus is paid to the policy and the premium.  In my opinion it's better to shop insurance brokers first, as any great insurance broker can get a variety of sources.

This is not a secret, this is what large companies do.  I don't get calls from $75,000,000 in sales companies saying "get me the best rate for my insurance," they don't even talk about their policy.  The first determination is does the broker/client relationship work.

Want to know why?  Because if there is an excellent underwriter out there given great coverage for great prices.  Guess what they do when the receive the same submission 3 times.  They decline.  And the big boys know that.  They know the relationship between the broker and the insured is the determining factor.

So first off what do you look for in a broker:

1.  Well just like any relationship, someone you can work with.  I'm not saying a yes man, in-fact, quite the opposite you want someone that can listen to your issues and give you solutions.  If you already know what you need?  Then why havent you started your own insurance brokerage, licensure is easy.  It's because there is expertise out there.

2.  What certifications do they have.  CIC is a well respected entry level type certification for a broker, I would not suggest ever working with someone that has not earned at least a CIC.  This shows they have knowledge in the product they sell.  Want an expert?  Find a CPCU.  The CPCU is the same designation that a Senior Underwriter has.  So this agent really knows his stuff.

3.  Can he scale to your plan.  Are you flipping are you holding are you in NJ, DE, PA, and NY, can he write all of those states.

4.  Does he have clout with his underwriters.  If you chose a CPCU, yeah he does.  Just those for initials after his name get the underwriter to know this is a serious agent.  If he's just a CIC, ask them how many investors do they work with, do they have any referrals or will you be the 5th guy he's tried to place with similar coverage.

5.  (And oddly last in my book, because if the rest works above you are good) What markets does he have.  Once you tell him about your needs, he should be able to tell you 2-3 markets he thinks will be a great fit.

After that, you will not need to rely on the novice advice of BP'ers when it comes to insurance.  Not to say some are not wise in their insurance purchasing.  In-fact some follow the exact advice above.  But many have claim horror stories, meaning they bought on price alone and assumed coverage.

Anyway good luck, and if you ever need any help just let me or my office know.  We are in all 50 states and do quite a bit in the NJ, DE, PA, NY, CT greater area.

Thanks!

Mike Hurney · Answer

@Brian Fernandes I'd start with Deductible and Personal Liability.

At one time I had $250. deductible and $100,00. personal liability but we never put in claims unless it was catastrophic so I changed it to $1,000. deductible and $500,000. (to $1,000,000. different properties were easier than others) Same price!

And check into Umbrellas.

Mike Wood · Answer

@Brian Fernandes First you should determine if the insurance policies are "approved" by your states insurance commissioner (or state officer that does that). Sometimes, you are qouted a policy that is offered as a secondary line policy or surplus line policy, which means that company is approved to sell insurance in your state, but the policy is not approved and backed by the state.

This may not be an issue in your state, it is in mine.  If the policy is approved by the state, it covers standard stuff the state requires, and for the most part its similar between insurance companies.  If its surplus line, you need to read it, to make sure everything is covered and no surprises.

I never buy insurance without reading the policy, but I have had large claims (Hurricane Katrina) in the past that i learned valuable lessons from.  Had I bothered to read my policies before buying them, I would have known how stupid I was with some of my insurance purchases.

I would suggest getting a copy of each policy your are considering and read thru them. If you see something you don't like, move on to the next.  Sometimes its not all about price (trust me).

Jacqueline Carrington · Answer

Excellent post @Derek Lacy!

What to look for in a home insurance policy to get the best deal?

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