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Financial Strength Ratings Help Determine The Best Homeowners Insurance Companies

By Mike Heuer

Finding the best homeowners insurance companies and determining various homeowners insurance company ratings first requires knowing what a homeowner’s insurance needs are, finding the insurers that specialize in such coverages and then seeing which ones have suitable financial strength ratings. Depending on the type of home, where it is located and which types of perils might be unique to that locale, there are many property and casualty insurers who provide various coverages and endorsements to fulfill the needs of homeowners.

For example, a home located in Florida or along the Gulf Coast is at a particular risk of flood damage as well as windstorms caused by the numerous hurricanes and tropical storms that tend to make landfall in those areas. Homes located along the West Coast typically are more prone to earthquake damage as are homes located near the New Madrid seismic zone roughly located near the Illinois and Missouri border. While most homeowners insurance plans do not provide coverage for those, endorsements can be bought to enhance the protection and help insure they are protected.

Likewise, homes located in Oklahoma essentially are safe from earthquakes and hurricane-related damages, but they are highly susceptible to tornadoes, hailstorms and occasional flooding if located near a river system. That means the best homeowners insurance companies for them would be those specializing in such policies or providing endorsements that fully protect them.

Knowing which companies to solicit and learning their homeowners insurance ratings can be difficult if a homeowner does not know where to begin the search. But a state department of insurance website generally will help consumers know which insurers provide which types of coverage while at the same time helping consumers know which ones are licensed to underwrite coverage in their respective states.

Once the coverages that are necessary are identified and the companies providing them are located, it then pays to determine what those insurers will not cover to see if their policies truly are worthwhile or if more hunting is necessary. Some might not provide coverage for damages caused by internal flooding while nearly all will not cover external flooding. If located near a heavily forested area, it pays to know if an insurer will cover the costs of falling objects or if an endorsement must be purchased. Likewise, wind and hail damage is one of the most significant sources of damages in many states, particularly those located in the Great Plains and the Midwest. If an insurer does not include those among covered perils, additional protection is needed.

Compiling a list of insurers providing all the coverage needed or at least offering endorsements for them helps lead to the next step to determine homeowners insurance company ratings, and that it learning their respective financial strength ratings. A.M. Best and other third party ratings services will help consumers determine which insurers have the funds needed to cover potential claims or is they are on the verge of insolvency. The best homeowners insurance companies will place the latest ratings in a prominent location on their websites and are proud to show they are financially fit.

But if the information is not found easily, visiting the ratings sites can help a great deal so consumers can assess homeowners insurance ratings and choose the best deal from the best homeowners insurance companies.