Top 10 Tips for New Home Buyers for Acquiring Homeowners Insurance
Buying a home is an exciting time in your life, but the process can be overwhelming. As you work your way through the many steps involved in purchasing a new home, it’s important to remember you’ll need a quality homeowner’s insurance policy. Homeowner’s insurance is a policy that protects you in the event of loss or damage to your home, surrounding property, and possessions. Massachusetts law doesn’t require you to have homeowner’s insurance, but your mortgage lender will likely require you to have a policy. These ten tips can help you choose the right coverage for your new home while still keeping a few dollars in your pocket.
1. Don’t skip the home inspection.
On the surface, the home of your dreams looks perfect. Or if it’s not, you’re prepared to renovate. Still, a home inspection is a vital part of the process. Your home inspection can help determine major defects that aren’t visible on the surface. A home in need of structural, roof, electrical, or plumbing repair could cost you a large sum of money. Problems that are brought to light during the home inspection could potentially be repaired to prevent you from spending more money on your home insurance policy.
2. Start shopping early.
Shopping around is an important way to get an understanding of the coverage you need at the price you want. Waiting until the last minute can put you in a position of stress and force you to rush through the process. This could result in high monthly premiums and coverage gaps. Even worse, poor insurance choices can cost you thousands of dollars when you need to file a claim. Even though you don’t technically own your new home yet, it’s fine to begin shopping for homeowner’s insurance as early as 30 days before signing.
3. Consider an independent agent.
Many mortgage lenders offer mortgage insurance. This insurance will ensure they get their money back in the event of a loss, but it might not be the best choice for you. While many homeowners stick to big-name insurance companies, they still might not be the best choice. An independent insurance agent isn’t dedicated to one company. Instead, they represent the client (you!) and offer a variety of choices to provide the best coverage and price.
4. Don’t base your policy on market value.
Home insurance is a safety net for a worst-case scenario in which you lose your home. The market value (or what you paid for the home) might be different than the cost of rebuilding in the event of a total loss. The cost of rebuilding your home doesn’t include the cost of the surrounding property, so if you own significant acreage, the insured amount will likely be less than your mortgage total. On the other hand, some older homes have details that are difficult to replace and might require more insurance. Your insurance agent can help you decide which factors will go into the insurable amount.
5. Learn what your policy doesn’t cover.
All too often, when disaster strikes, homeowners just assume their homeowner’s policy will cover the damages. Sadly, many homeowners don’t realize their homeowner’s policy doesn’t include flood insurance. It’s important to compare various homeowner’s insurance policies and investigate additional policies for extra coverage you may need.
6. Look for discounts.
Different insurance companies offer discounts to homebuyers based on a variety of criteria. Many major insurance companies carry new home discounts or safety discounts. Independent insurance agents can help you compare discounts through a variety of reputable companies to find the one that best suits your needs. Some common discounts include multi-policy, superior construction, and protection/alarm discounts.
7. Check your credit score.
You already know a good credit score can help you get a better mortgage. It can also save you money on homeowner’s insurance. While there is no exact science to calculating risks, some insurance companies believe that a low credit score shows the potential for higher risks. Alternately, an established credit history without late payments and collection accounts can lead to lower rates. https://www.credit.com/loans/mortgage-questions/does-your-credit-score-affect-your-homeowners-insurance/
8. Combine policies.
If you drive a car in Massachusetts, you’re required to have automobile insurance. Many policyholders also need commercial insurance and choose to get additional coverage for pets, additional liability, or coverage for other possessions. Getting multiple insurance policies through the same insurance agent can help you save money.
9. Fill in the gaps.
Learning what a traditional homeowner’s policy doesn’t cover can be disappointing. For instance, flood, sewer damages, and earthquakes aren’t generally covered by a homeowner’s policy. However, there are ways to ensure you still get the coverage you need. Personal articles insurance can provide more coverage for your possessions and an umbrella policy can provide additional liability.
10. Consider your location.
Not surprisingly, your location plays a major part in the potential for damage to your home. However, there are other important roles your location plays when it comes to caring for or replacing your home. If your state is prone to floods, earthquakes, wildfires, or tornados, your rates may be higher. However, many homeowners are actually underinsured when it comes to a total loss. Other things to consider about your location include the cost of building materials and accessibility for emergency personnel.
Homeowner’s insurance isn’t just a standard requirement or an extra step in the home buying process. It’s a vital way to protect your new home, property, and possessions. Learning all the details about the coverage you need can help keep you covered in the event of an unexpected emergency and help you save money in the process. Finding an insurance agent you can trust is the best way to ensure you get coverage for everything you hold dear. At LoPriore Insurance Agency, our motto is insurance that fits your lifestyle. If you’re in the process of searching for or purchasing a home in Massachusetts, get in touch with LoPriore Insurance to learn more about homeowner’s insurance coverage and the best policies to take care of your new home.