3 Things to Look for When Choosing a Home Insurance Policy

Choosing the right policy can provide essential protection at the right price.

Choosing the right homeowners insurance policy is important. After all, for most homeowners, their house is their single largest asset -- and it is also where they keep all of their valuable possessions.

Unfortunately, it's not always easy to figure out what the best policy is. To find the perfect insurance carrier for each home, homeowners should look at three key features:

• Price
• Customer service and claims handling
• Coverage options

1. Price

Price is obviously an important factor when choosing a home insurance company because the policyholder will have to pay homeowners insurance premiums for the entire time the house is covered. This usually means decades of paying insurance premiums for homeowners who stay put over the long term.

Property owners can, and should, compare prices from multiple different home insurance providers to make sure the rate they are being charged is a fair one. And it's a good idea to get periodic home insurance quotes in order to see if another insurer has come on the market offering a better deal or if a different company may provide better pricing based on the property owner's current situation.

Homeowners shouldn't base their insurance-buying decision entirely on price because other things matter too. But affordability is definitely a primary concern because even small differences in premiums can add up over many years.

2. Customer service and claims handling

The insurer's reputation for customer service and for handling claims is also really important to consider.

After all, insurance is a financial product that homeowners rely on during their time of need after a crisis. For a property owner whose home has been burned down or otherwise damaged, the last thing they need is to end up fighting with an insurance company to get their damage claim paid fairly and promptly.

Homeowners can review insurance company ratings prepared by J.D. Power & Associates to get an idea of which insurance companies have a solid reputation. Reading online reviews of insurers can also be helpful in determining how an insurance company treats its customers.

3. Coverage options

Finally, homeowners should make sure they are getting the best and most comprehensive coverage they need.

Pretty much all insurers offer certain basic types of homeowners insurance coverage, such as personal property protection coverage and dwelling coverage. Together, these policies pay for the repair or replacement of the home and its contents if something goes wrong that's covered by insurance.

But some insurers offer unique coverage options that others don't or include certain coverages as standard when other insurers charge extra. For example, some insurers will pay for a home to be brought up to current building codes after they are damaged, even if that means doing extra upgrades. And some cover identity theft.

Homeowners should make sure they understand what kinds of coverage they need and find an insurer that provides it. By researching coverage options, customer service and claims handling, and premium prices, property owners can find a home insurance policy that's right for their needs.