Become a smarter homeowners insurance consumer by outsmarting the contract

Homeowners Insurance – Become Smarter than Your Agent

The metaphorical small print on homeowners insurance agreements is the stuff of legend for insurance agents.
It's even probable that insurance get-togethers echo with the laughter of agents throwing around stories about non-concurrent policies and the nuances of flood insurance versus hurricane insurance.

Such nuances have brought headaches for many homeowners, as many fail to understand them until it's too late. Here are some things to keep in mind.

You Don't Need to Read Between the Lines

While lawyers are trained to read the complicated, clause-ridden text that is an insurance policy, most people may completely miss the point. In order to protect the interest of homeowners, a new law has been enacted and passed in parts of the United States making it mandatory for insurance companies to write their insurance policies in plain English.

If you need your homeowners insurance policy to be even simpler, all you have to do is ask. There's nothing illegal about asking for a simpler explanation of your policy.

They Are Not Invested in Your Happiness

Insurers are not in it to make you happy; quite the opposite. According to a report released by the North Dakota Insurance Department, some insurance companies routinely incentivize low payment goals. Adjusters are rewarded with pizza parties and gift cards if agents are able to convince clients to accept lower payments than what they're actually entitled to.

Replacement Value: Not the Real Value of Your Stuff

Your $3,000 HDTV (extra for surround sound!) might only receive $800 in compensation if you get a successful home insurance claim, because that's the full amount of the replacement value, not the actual cash value (i.e., what you paid). So it literally pays to insure for the total amount you spent on your stuff.

A good homeowners insurance should offer all-round protection. You can easily avoid the unsavoury examples mentioned above by carefully choosing the company you insure with. By sticking to well-known insurance companies that have a reputation to maintain, you will be able to avoid a lot of heartache in the long term.