Key Considerations When Purchasing Home Insurance
Looking for the right homeowner insurance is one of those nagging tasks that usually get overlooked by home buyers. Insurance agents are no longer surprised to receive frantic phone calls from title or escrow firms requesting a home insurance binder. Once you have agreed on a purchase offer with the seller, look for a suitable homeowner policy right away. And keep in mind that homeowner insurance is not the same as a home warranty plan.
Here are key tips about buying homeowner insurance that will save you time as well as money:
Factors Affecting Insurability
To quote you a good rate for your policy, your insurance agent will need to consider a few relevant details.
These include, among others, your homes square footage and location, when it was built, the age of your plumbing and electrical systems, the type of roof you have, and the number of claims, if any, filed within the last five years.
If you live in a faraway place where theres no hydrant, let alone a fire department, within reach, expect your insurance application to be declined. If thats the case, you will need a specialty or surplus-lines company, but know that it usually takes longer to get a quote.
The higher your deductible on your policy, the more you can save. In most cases, insurance firms will start giving discounts from a deductible of $500, going up as you increase your deductible. With most insurers, the highest deductible you can get is 10,000. However, because some mortgage companies disallow deductibles above $1000, make it a point to ask your lender first.
How Much Insurance Should You Get?
Always remember that dirt will never be part of home insurance. So if youre planning to buy a home with a large lot, dont be shocked to know that the value of your policy will be so much less than what youre paying for the property. Coverage is only for the home, which does not include the land.
The good news is, you have lots of options that you can tailor your home insurance policy with.
One is liability coverage, which is usually overlooked. This will protect you from claims that arise from property damage as well as bodily injury.
Any credits for which are eligible, take advantage of them. If your home is equipped with a monitored alarm system, you can automatically get a discount as high as 10%. If youre above 50, you may also get a discount.
Reviewing Your Policy
Speak to your agent and examine your home insurance policy at least every three years. Markets evolve, your needs change, and even coverage changes. Your insurance should always be updated because, after all, you can never tell when youll need it.