Comprehensive Homeowner Insurance - Is It Worth It?

If you compare homeowner insurance plans side by side without regard to cost, the award for best homeowners policy will always go to the one that provides the maximum amount of comprehensive coverage. If you wanted to encapsulate the definition of comprehensive coverage, it would be a fair summation to say that it’s the ultimate, worry-free policy. But is it really worth the cost?

Ultimately, the decision as to whether or not comprehensive coverage is worth the money you’ll pay is yours to make. There are two primary determining factors that can help you arrive at that decision.

1. How big of a consideration is cost? If you’re flat broke and need to get signed up for the best homeowners policy that limited funds can buy, it’s a fair assumption to say that comprehensive coverage isn’t for you. Despite what some may tell you about how you can’t afford not to over-insure yourself, it’s actually a smarter decision to hedge your bets against catastrophe striking in the form of some uninsurable peril than it is to stretch yourself financially to the point where you can hardly pay the light bill. A lot of us have been there, done that, and have the war wounds to show for it. If this sounds like you, you’d probably be better off getting the minimum amount of coverage until you’re in a better financial position.

2. Is peace of mind worth the extra money to you? In that case, there’s no reason not to opt for comprehensive home insurance. Especially if it’s well within your means to afford it and you’re the kind of person who won’t let yourself live it down if you suffer serious losses to your home as the result of something that isn’t covered by standard homeowners insurance.

How Much More Does Comprehensive Insurance Cost?
A great question. If you compare homeowner insurance policies, comprehensive coverage will run you about 15 percent more than a standard insurance policy. Considering that in 2010, the average dollar amount paid out by homeowners for insurance coverage was $791, this means that you’ll only pay around $120 more per year for comprehensive coverage. Of course, those figures are only averages. The fact is, there are a number of determining factors that can either dramatically increase or significantly decrease what you’ll actually end up paying. This includes:

• Your history of claims. If you’ve established a history of filing claims on a regular basis with your insurer, you can expect for your insurance premiums to rise. Insurance companies see people who file frequent claims as higher risks, and they’ll try to offset any potential monetary losses by upping the amount you pay.

• Your ZIP Code. Where you live figures heavily into the estimate you’ll receive when you compare homeowner insurance rates. If, for example, you live in an area that has a high crime rate, you’ll see it reflected in above average insurance costs. Insurers also take into account the size of your home, its age, its condition, and even your distance from the nearest fire station.

• Your personal information. Although insurers can’t discriminate against anyone based on sex, race, religion, and other protected categories, they can hold it against you if you’ve left a lot of debtors chasing after you for uncollected sums. If your credit record is as clean as a whistle, you don’t have to worry about this being held against you – but it’s always in your best interest to be aware of your credit rating in case there’s something on your credit record that’s either inaccurate or that you’ve since paid off.

You can compare homeowner insurance plans online, or get more in depth information by talking directly to an insurance agent. When comparing, be sure that you don’t just look at the bottom line – cost – but also take into consideration which insurer will provide you with the most amount of coverage for your money.