Top 6 Tips Buying Home Insurance
It ’s kinda tricky you know, shopping for homeowner insurance. It ’s well known as one of those nagging home buying details that sometimes manages to slip through the cracks. And when it slips, that would be one of the most suckiest moment of our life. No, seriously. It is.
I ‘ve experienced it once, the insurance agents usually receive those last-minute frantic phone calls from title and / or escrow companies requesting a home insurance binder. It’s a common stuff though.
So to save yourself trouble, it ’s always a good idea to start shopping for a homeowner policy as soon as your purchase offer is accepted. So based on some of my cases plus some close friends of mine, I dig and did some researches to some of great resources such as Ann Arbor Home Insurance – here ‘re 6 tips you seriously must know to buy homeowner insurance. Specially written for you to save you time and money. Here we go :
1. First, Determine the Insurability
Your insurance agent needs extensive information from you – to get you the best quote rate for your policy. An agent would ask things below to determine insurability:
- When was the home built?
- What type of roof?
- What’s the square footage?
- How old is the plumbing and electrical?
- Where is the home located?
- How many claims have been filed over the past 5 years?
Say, your home is located in a rural area with no fire department nearby, or no fire hydrant could be found on the street, I ‘m pretty certain, some companies may refuse to insure yours. In this very case, you ‘ll gonna need to inquire at a surplus-lines or specialty company. And this one my friend.. will definitely take much more longer to obtain.
2. Higher Deductibles
Save money by having a higher deductible on your policy. Insurance companies will typically start giving discounts at a $500 deductible. This amount will increase accordingly as your deductible increases. As far as I know, you can get up to $10,000 deductibles offer which most companies offered. At this point, you need to be absolutely careful, as many mortgage companies won ‘t allow you to exceed a $1,000 deductible. So before opting for a higher deductible, check with your lender. It ’s a must.
3. How Much Do You Really Need?
Just for your information – to figure cost replacement estimates – most agents use a cost estimator. To ensure that yours is being insured for the correct amount. They won ‘t insure dirt, so you know. You buy a home that includes a large lot, let’s not get too freaked out when you get an insurance policy for way a lot less than what you ‘ve paid for the home. In their point of view, you ‘re buying coverage for the home, not, I repeat – not the land.
Back there, there was Guaranteed Replacement Cost, a replacement coverage. No such coverage anymore at present. It is now a Replacement Cost Coverage. Meaning, on top of the insured amount, each insurance company designates a percentage of additional coverage. It ’s a protection for the homeowner who has suffered a loss from having to pay additional construction costs to rebuild. As we ‘ve all knew – it can cost more to build because of inflation or the increasing of material prices. Here ’s a quick example : The dwelling coverage is insured for $300,000 – The company has 125% replacement cost coverage. You, as the homeowner would receive an additional $75,000. I personally recommend 200% replacement cost coverage, which gives you double the coverage.
4. Policy Options
In this 4th tips, I ‘m gonna need to remind you about a part of your homeowner’s insurance policy which mostly often overlooked by most people. It ’s the Liability coverage. This is the part that you can tailor for your other choices. What is it again? It’s the policy that protects the insured against claims arising from bodily injury and property damage to others.
Another quick example is : if your 5-yo son was playing with matches – and set your neighbor’s house on fire, your liability coverage would pay for this damage. You may still need to move out of the neighborhood though, but your insurance policy would pay your neighbor.
5. Get All Available Discounts
You need to make sure that you ‘re getting all of the credits you ‘re eligible for. Say, if you have an alarm system that reports to a central station – a company such as Brinks or ADT – in some cases – you can get up to a 10% discount. If you are over 50 and care to admit it, you may be eligible for another discount. Companies have different names for age preference policies, from senior discount to mature policyholder discount.
The most common discount is the multi-policy discount. This will save you money on your home and auto insurance. By combining the two policies with the same company, you are given a certain percentage discount on both. the percentage discounts vary among companies, so it’s best to shop around.
6. Review Your Policies Periodically
You need to call your agent and review your homeowner policy at least every three years. Needs change, markets change and coverages change. You should stay up-to-date on your insurance because you never know when you will need to rely on it.
Okay, this would be the end of it. There you have ‘em, the top 6 tips buying home insurance, you really need to know, to save you time and money.
Alrite, keep the neighborhood safe for children, and keep it green.
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