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Basic Considerations for Buying Home Insurance

Shopping for homeowner insurance is one task that home buyers typically forget to do. Insurance agents are no longer surprised to receive frantic phone calls from title or escrow firms requesting a home insurance binder. To avoid this scenario, shop for a homeowner policy the moment your purchase offer is 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 needs a good amount of information to be able to quote you the best 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 this case, you can ask for a quote from a surplus-lines or specialty company, but dont expect it to come as quick.

Setting Deductibles

A higher deductible on your policy means bigger savings. Insurance companies usually give discounts starting at a $500 deductible, and as your deductible goes up, so does your discount. 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 Should You Insure For?

Remember that insurance companies will not insure dirt. So if youre buying a house with a huge lot, expect your policy to be worth so much less than the price of that property. Thats because coverage is only intended for the home, excluding the land.

Coverage Options

Whats great is that you have so many options with which to tailor your home insurance policy.
For example, theres liability coverage, which many people miss. This protects you against claims due to bodily injury or property damage.

Credits

Any credits for which are eligible, take advantage of them. An alarm system that reports to a central monitoring station can handily fetch you as much as 10% in discounts. And if youre older than 50, you might just get another type of discount.

Knowing Your Policy

Speak to your agent and examine your home insurance policy at least every three years. Everything changes, from your needs to your coverage and even the market itself as a whole. Your insurance should always be updated because, after all, you can never tell when youll need it.

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