NYT Financial Tuneup Day 6: Property Insurance

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nyt_ftuDay 6 of the NY Times 7-Day Financial Tuneup is about insurance. Specifically, either homeowner’s or renter’s insurance to protect yourself against a large financial hit. (Sign up for your own personalized tune-up here.)

Do a home inventory. Basically, take a video of everything you’d want an insurance company to replace if your home was destroyed. Store the video somewhere safe, like the cloud or a flash drive in a secure location. You can use this video to both get appropriate insurance coverage and if you do end up filing an insurance claim. I’ve seen some apps that help you do this in detail, but I agree that a simple video is a reasonable solution.

Check your current policy. Find a copy of your insurance policy. Make sure you have enough coverage. Note the difference between a “replacement value” and “fair market value” policy.

Shop around with some competitors. The NYT recommends picking two of the major insurance companies (Geico, Progressive, Allstate, State Farm, etc.) and call them for an insurance quote armed with your home inventory list. If you are willing to try a start-up insurance company, I would throw in a free online Lemonade quote if you are in one of their 9 covered states – New York, California, Illinois, New Jersey, Rhode Island, Texas, Nevada, Ohio, and Georgia. If you get a quote that is too high, simply move on.

I also recommend doing a search for “[Your State] Department of Insurance” and look for a “Homeowner’s Insurance Guide” of some sort. Insurance companies are closely regulated on the state level and you can often find a list of sample premiums, a ranking based on complaints ratio, or other useful information. This can help you narrow down your initial search and save time. For example, here are some links for New York and California.

Call your current insurance company. Call your current insurance company and first, confirm that your policy coverage details. Then, ask if there’s any way to reduce your insurance rate. Mention a competing quote if you have one.

Financial Tuneup Recap (still in progress)

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  1. title still says ‘Day 5.’

  2. I would not just “call two of the major insurance companies” but would also “call an independent insurance agent that represents multiple companies” to get quotes. Over a period of many years I have gotten the best quotes and the best service from independent agents.

    • I think that is good advice as well. Is there a list somewhere of insurance companies that do not work with independent agents? I have no problems with using an agent, but I doubt even an independent agent won’t shop around for rates with a company that doesn’t provide a commission.

      • There is very little overlap between the big guys and the companies independent agents represent so you get a larger universe of possibilities. The agents I have worked with have been amazing at finding better deals. As far as I’m concerned they have worked for the commission and they deserve it. Sometimes just to be thorough I will check with one or two of the big guys. They are never cheaper–at least for my circumstances.

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