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Finding the right homeowner insurance is one of those details that home buyers often take for granted. Its not uncommon for insurance agents to get panicked phone calls from title or escrow companies asking for a home insurance binder. To avoid this scenario, shop for a homeowner policy the moment your purchase offer is accepted. And take note that homeowner insurance and a home warranty plan are not one and the same.
The following tips will help you purchase home insurance, and save time and money at the same time:
What Affect Insurability
Your insurance agent will consider a number of details before quoting you a rate for your policy.
These include your homes area, where it is located, when it was built (including plumbing an electrical systems), the type of roof installed, and how many claims youve made five years ago until now.
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
The higher your deductible on your policy, the more you can save. Insurers typically offer discounts beginning at $500 deductibles, going up as your deductible increases. The maximum worth of deductibles is $10,000 for most companies. However, be careful because a lot of mortgage companies will not let you choose higher than a $1000 deductible, so be sure to check with your lender first.
How Much Insurance Should You Get?
Always remember that dirt will never be part of home insurance. So if the house you want to buy comes with a huge yard, dont be surprised to get insurance that is a lot less than the price of the property. Thats because coverage is only intended for the home, excluding the land.
Coverage Options
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 protects you against claims due to bodily injury or property damage.
Available Credits
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%. And if youre older than 50, you might just get another type of discount.
Reviewing Your Policy
Talk to your agent and go over your homeowner policy at least every three years. Markets evolve, your needs change, and even coverage changes. Your policy needs to be current all the time because theres no way of telling when youll need to depend on it.