Basic Considerations for Buying Home Insurance
Finding the right homeowner insurance is one of those details that home buyers often take for granted. Insurance agents get those frenzied calls from insurance agents all the time, seeking a home insurance binder. Make sure you shop for a homeowner policy as soon as your purchase offer has been accepted. And remember that homeowner insurance is different from a home warranty plan.
The following tips will help you purchase home insurance, and save time and money at the same time:
Factors Affecting Insurability
Your insurance agent will consider a number of details before quoting you a rate for your policy.
These include your homes location and area, the year it was constructed, when your plumbing and electrical systems were set up, the type of roof above your head, and how many claims were filed over the past five years.
If your home is located in a rural area where theres no fire department or at least a fire hydrant close by, your application for insurance may be rejected. In such a case, you may have to approach a specialty or surplus-lines company, but be aware that a quote will probably take longer to arrive.
Working with Deductibles
A higher deductible on your policy means bigger savings. In most cases, insurance firms will start giving discounts from a deductible of $500, going up as you increase your deductible. There is a maximum deductible amount that insurance companies allow, and in most cases, this would be $10,000. However, because some mortgage companies disallow deductibles above $1000, make it a point to ask your lender first.
How Much Should You Insure For?
Take note that insurance firms are not going to include dirt in the coverage. 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. Thats because youre paying for coverage for just the home, not the land.
There are other options for you to choose from as you create the perfectly tailored home insurance policy for your needs.
One example is liability coverage, which people all too often overlook. This will protect you from claims that arise from property damage as well as bodily injury.
Be sure to avail of all the credit that youre qualified for. If you have an alarm system that is hooked to a monitoring station, you could easily get up to a 10% discount. If youre above 50, you may also get a discount.
Knowing Your Policy
Call your agent and review your policy once every three years. Things change, from your coverage to the market and of course, your needs. Your insurance should always be updated because, after all, you can never tell when youll need it.