The homeowners insurance marketplace here by the Jersey Shore is getting tougher, especially after Sandy.  If you follow a few guidelines, though, you may be able to avoid paying through the nose, or worse, wind up with worse coverage.
  1. Know what to ask.  OK, so we all know to talk about replacement cost on the building, and how much dollar amount coverage you need, right.  There are other key questions, though, that will affect how your claim is handled:
  2. What is the A.M. Best Rating of the Company?  A.M. Best is the largest and most respected financial rating company that reviews and rates the financial stability and reliability of insurance companies.  The rating system is like grades in school, A+ being the best.  In our agency, we look for A ratings or better.  In some cases, after careful review, we have used carriers with ratings as low as B+, but only under special circumstances.  Stay away from companies with a rating lower than B+, especially when there is no A.M. Best rating at all!
  3. What is the deductible for wind or hurricane?  There are two kinds of higher deductibles for storms – hurricane deductibles and wind deductibles.  Both are common in our area, depending how close your property is to the coast, and they are usually stated in a percentage of your building coverage.  For example, a 2% hurricance deductible on a $500,000 home would be $10,000.  Hurricane deductibles in Ocean & Monmouth Counties are common, and would only apply if the storm was officially a hurricance (Sandy was not).  A flat Windstorm deductible, however, is much different because it applies to all wind damage, hurricane or not.
  4. Are you an agent for this company?  Will your name be on my policy?  If the agent does not directly represent the company, then it will be harder for them to work for you.  It means that they are brokering the policy through another agent and do not have a relationship with the insurance company. This is a disadvantage for both of you in the event of a dispute or claim.