Shopping for Home Insurance: What You Need to Know Before You Buy | Ep. 231

Intro/Outro: You know what it is? That’s right. It’s time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It’s the Money Talk with Tiff podcast.

Tiffany Grant: Hey everyone, and welcome to another episode of Tiffany’s Take where I answer your Monique’s questions. So if you have any questions, Go to www.moneytalkwitht.com/ask Tiffany, and I’ll be more than happy to answer for you.

So today I wanted to hop on the mic because I was in a meeting with one of my clients and we were talking about home insurance because unfortunately, um, they. Dealt with a loss of their home and we were going over what to do next. Right? And one of the things that came up was home insurance coverage.

Okay? Now, when she reached out to the insurance company, come to find out her insurance did not cover. All that it costs to rebuild the house. And so that got me to thinking, well, if you think about it, because of inflation and now that home, um, building costs are so much, your insurance might not be enough.

And so low and behold, I went and I called my insurance company. And I did not have enough to rebuild my home either, and so I had to get new insurance. So I wanted to do this episode kind of as like a PSA slash helping you think about. When was the last time you shopped for home insurance? And when was the last time you looked at your policy to make sure that it was enough?

Now, if you find yourself in a situation like me and her where we didn’t have enough, then I wanted to give you some tips to, um, think about when you are shopping around for home insurance coverage. So, Let’s just hop right into those real quick. Um, I won’t make this episode super long and in depth. This is just to give you some things to think about.

So first, think about your geographical location. Okay? So your location plays a huge role in determining the type of coverage that you need. So if you live in an area that’s prone to, let’s say, Earthquakes or maybe floods, then you might need some additional coverage. Cuz usually, uh, regular home insurance does not cover those types of things.

And so you would need a rider or maybe an additional policy, um, in order to cover those. So just think about where you live and if you need those policies. Also, you wanna think about. Your home type. Uh, so, uh, if you live in a single family, that requires a whole different coverage than a townhouse or condo.

So if you’re going from a single family home to a townhouse or a condo to a townhouse, so on and so forth, understand that your insurance costs might be different. So make sure you factor that into your move. Know your coverage amount, so you have to determine the coverage amount that you need to protect your home and your personal belongings.

Adequately, uh, don’t settle for a standard policy without understanding the limits and exclusions. Just like in these examples that I gave at the top of the episode, we did not have enough to protect our home and our personal belongings adequately. And that was because we had, we didn’t even go back after we bought the policy, you know, and it just keeps renewing, renewing, renewing.

You don’t go back and think about, oh, well I bought. A lot of high price things now that I need to cover or you know, is inflation making the cost of home building more. So think about what you want your coverage amount to be ahead of time so that way when you go to the different companies and shop around you ha kind of have an idea of what you’re looking at.

Of course, they do help you too, but just have a rough estimate idea of what you think you need. Make sure you choose your deductible wisely. So this is number four. A deductible is the amount you pay out of pocket before your insurance kicks in. So typically with home insurance, you know, it might be 500, a thousand, 2000.

You know, it completely depends on you, but. Choosing a lower de deductible means paying higher premiums. So it’s essential to make sure you have a balance between affordability and what coverage you have. So I, for instance, I think for my house I have a thousand dollars deductible. I know that I could be, I could pay a thousand dollars easily, um, to cover that.

Uh, I don’t wanna be in a situation where, The deductible’s so high, I don’t even have the money to kick it in. You know, I don’t even have the money to pay the deductible so that way insurance can do something. Um, so you wanna make sure that you’re thinking about, um, thinking about that. And that applies to any deductible, whether it is health insurance or house insurance.

Or auto insurance. They all have deductibles. So think about that. Um, also you wanna make sure that you look at the insurance company’s reputation. One thing that I do is I look at their reputation for customer service, how they handle claims. Do they have a lot of complaints out there? Like, oh, they were a nightmare to deal, deal with, or, They was finding anything and everything not to pay my policy, so on and so forth.

Like you wanna make sure that if the need ever arises, this is an insurance company that will help you. Um, so, uh, I usually research those reviews and ratings online, or I’ll ask some family and friends for recommendations. Who do they have? Have they ever had a claim? Do they like them? Was the claim process simple, easy, you know, so on and so forth.

So just thinking about that as well. Uh, also think about. Liability coverage. So liability coverage protects you against legal claims if someone gets injured on your property. So make sure you have enough liability to cover, um, and avoid any financial losses. So I actually make a joke with people that visit me, like if they act like they got hurt or something.

Now, of course they didn’t really get hurt, but. If they like acting like they, I said, well, I’m not putting it on my insurance. So, you know, we have like this running joke, but I say that to say if somebody does get injured at your house for real, um, they could see your insurance company for liabilities. So you wanna make sure that you have enough coverage in place so that way you don’t have to come out of pocket for those costs.

Maybe hospital bills or what have you. Also, I wanna mention your personal property coverage. So this goes in line with what I talked about a little earlier, but you wanna make sure that your personal property is covered from theft, damage, or loss. So determine a rough estimate of. The things of value in your house, and that way you can choose a coverage limit that actually covers everything.

So, um, highly recommend thinking about that. A lot of people don’t, but if somebody damages your property in your house or you know, somebody comes in and, and steals it or what have you, that stuff can be covered through your home insurance or renter’s insurance if you’re a renter. Make sure that you are comparing your policies and rates.

So this is another thing that I know a lot of people don’t do. Um, how I kind of do this is I go to multiple independent agents, and so an independent agent already shops multiple insurance carriers, so they will shop. Different insurance carriers, whoever they have a relationship with. And so you can go to an independent agent, say, Hey, look, and they’ll already be shopping multiple.

Um, places, but I take it a step further and I just go to multiple independent agents. So now am I not only shopping with who they have a relationship with, I’m also shopping with whoever that next person has a relationship with too. So anyway, I say that to say, make sure that you’re comparing policies and rates, you’re shopping around for all of that, for all of your insurances.

Not home, just home insurance, but this is definitely. Important because you can be overpaying, and I usually shop around every six months or so for my auto and every year for my home insurance. So you can always switch insurance companies. Don’t think that you’re locked in. Okay. I will say, um, make sure that you are not overpaying for your insurance.

Um, but you have the adequate coverage. So it’s a balancing act. You don’t wanna overpay, like have too much insurance, but you also don’t wanna have enough and then be stuck if something was to truly happen. So, Work with your insurance agent. Make sure you find rep reputable insurance agents that can help you in not just trying to make a dollar, uh, but help you find the right balance between that coverage and affordability.

So those are my tips for shopping, for home insurance coverage, and really any insurance cuz all of these are kind of apply. Uh, so. If you have a question that you want to get answered on the Money Talk with Tiff podcast, just go to www.moneytalkwitht.com/tiffany and I’ll be more than happy to answer. So until next time, I hope you all have a brilliant and wonderful rest of your day.

Bye.

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