First Time Buyers Guide to Homeowner’s Insurance
So, you are buying your first new home! Congratulations! The excitement is overwhelming and making important spending decisions about insurance is one of them. Homeowner's insurance is one of the biggest and most important choices about how to protect your new investment. You need to understand what the policy covers, how it will help you if you have a claim and of course, how it fits into your budget.
Protecting Key Components
Homeowners’ insurance ensures replacement of the physical structure of the building for rebuilding costs if some type of serious event takes place. It also replaces belongings from theft or disaster. There is also a coverage for medical expenses and liability should someone get injured on your property.
Be Prepared at Closing
A Homeowner’s policy should start on the first day of home ownership. Most mortgage lenders require their clients to have the policy binders with them at the closing. If required, your insurance could become a part of the escrow account, so the monthly mortgage payment includes the cost of the insurance policy. Otherwise, you may be responsible for paying for the policy yourself.
So Many Choices
With so many insurance companies out there, how do you know who to choose? Having an experienced independent agent with options walk you through the process, can ease some of the worry. They can evaluate your needs and budget and find you the best coverage to fit your lifestyle. But know that you are never handcuffed to any one insurance company. Every renewal depending on your premium, you should take an opportunity to ask whether this policy and company still fits your needs.
Savings, Savings, Savings
Credit score matters! The higher your score, the lower your insurance premium. Additionally, a higher deductible can save on premium. Home safety features like deadbolts and smoke detectors, security cameras and sprinkler systems could qualify for discounts too.
Potential Red Flags
Trampolines, swimming pools, and certain dog breeds often cost homeowners more on their insurance. In some cases, they can keep you from getting good insurance altogether. Some factors could even be something you cannot directly control, like neighborhood crime rates or the age of the home. Do your research before you buy. Just like anything, prep work can save you the headaches and help moving day be a smooth transition.
Let us take some of the worry out of new homeownership!