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 home 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.
Finding ways to save money during the process is a significant priority. Purchasing an insurance policy that will protect your new investment while still saving money is a big step in the right direction. This insurance checklist can help you save money on essential purchases and help protect your future.
Make Early Decisions That Will Pay off in the Future
If you’re looking for a new home but not quite ready to buy, now is the time to take steps in preparation for the big purchase. Learn your current credit score and take steps to improve it if necessary. Pay off credit cards monthly and avoid late payments on current bills. Create a new home buyer’s insurance checklist.
If you’re currently renting your living space, get renter’s insurance. Insurance companies look at your insurance history when determining your home insurance rates. A claim-free renter’s insurance history can mean discounts up to 25% on your first homeowner’s insurance policy. Additionally, renter’s insurance is inexpensive and can help you avoid potential financial burdens in the event your property is damaged or stolen.
Don’t Leave Your Insurance Purchase Until the Last Minute
Purchasing insurance is an important step in the insurance checklist when buying your home. However, many new home buyers get busy searching for the perfect home, securing a mortgage loan, and negotiations. Purchasing a homeowner’s policy gets pushed back to the last minute. This is a poor decision because it significantly narrows your options.
Your homeowners insurance policy is more than just a step in the process. It provides protection for your home, possessions, and your family. When you don’t have time to choose the coverage you need, you could lose hundreds of dollars by not taking advantage of savings. Even worse, poor coverage will leave you underinsured, which could cost you thousands of dollars in the event of a loss.
Don’t Skip the Home Inspection
No matter how nice a home looks on the surface, or you feel the home of your dreams looks perfect. A home inspection will help you discover important information about your home’s condition. 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 prior to sale and save you the expense of spending more money when purchasing your home. Also, the results of your home inspection can also give you an edge during negotiations or help you save money on your home insurance policy.
Learn Ways to Save on Your First Homeowner’s Insurance Policy
There are a variety of ways to save money on your homeowner’s insurance. Making a careful choice will save you money now and in the future. It will also help you determine the types of coverage you need to keep your home and possessions properly protected. Use these tips to save money on your first homeowner’s insurance policy. 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 the following: include multi-policy, superior construction, and protection/alarm discounts.
- Seek multi-policy discounts by getting all of your policies in one place
- Look for new home discounts
- Talk to an independent agent about customized policies
- Install safety features like burglar alarm, sprinklers, and smoke detectors
- Get multiple quotes from your local independent agent
- Install lighting security upgrades
Start Shopping for Homeowners Insurance Early
Shopping around is an important way to get an understanding of the coverage you need at the price you want. If you are waiting until the last minute, this option 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.
Don’t Assume Your Insurance Will Be the Same as the Current Home Owner
It’s common for buyers to ask the current homeowner about the cost of utilities and property taxes to get an understanding of the cost of living. Unfortunately, this tactic isn’t effective when it comes to purchasing home insurance. There are a lot of factors involved in the determination of your home insurance costs. While the location and age of the home are important elements, your personal information and history are also a crucial part of the puzzle.
Consider an Independent Insurance Agent Instead of a Mortgage Broker
An independent insurance agent works with a variety of insurance companies to find policies that match your needs while saving you money. This means you can get the coverage you need without paying for extras you don’t. Additionally, independent agents are typically familiar with the local area and have the ability to help you determine the coverage you really need for your new home.
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.
Learn the Details
Understanding the details of your home as it relates to insurance costs, could you plan for the total cost of your insurance and get the coverage you need. While your personal information plays a part in your insurance cost, there are many factors about your home to consider as well. Learn these facts about your home before talking to your insurance agent.
- Age of the home
- Condition of the roof
- Proximity to the coast
- Location of the fire department
- Quality of construction
- Flood risks
- History of earthquakes
- Special features that may be a liability like swimming pools
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.
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.
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.
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.
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/
Combine Insurance 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.
Learn More About Completing Your New Home Buyer’s Insurance Checklist
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. Don’t leave the future of your new dream home to chance. 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.
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TOP 5 Faq’s for New Home Buyers Home Insurance Checklist
Will my homeowner’s insurance cover all damages that occur in my new home?
Not necessarily. The amount and types of coverage included in your homeowner’s policy will dictate what damage is covered. It’s important to note that a typical homeowner’s policy does not cover floods or events that are preventable by reasonable home maintenance. Your homeowner’s policy will include a list of covered events and exclusions. It’s also important to note that your policy will only pay up to your coverage amount, and you’ll have to meet your deductible before a claim is paid.
Is homeowner’s insurance included in closing costs?
Your lender will require the first term of your home insurance to be paid at closing. If you have an escrow account, your lender may collect 10% to 20% of the annual cost of homeowners’ insurance to be deposited into the account. If your lender doesn’t require you to have an escrow account, you may have to pay the entire first year’s premium for home insurance before closing.
How do I decide when to file a claim?
It’s important to remember that homeownership comes with a variety of new responsibilities. Homeowner’s insurance is designed to cover big losses. When you experience damage that might be covered by your policy, it’s a good idea to consider how close the cost of damage is to the cost of your deductible. If your claim will offer minimal assistance after you pay the deductible, you may be better off not filing a claim. Small claims filed frequently can raise your insurance rates.
How can I figure out if I should buy extra coverage for exclusions?
If you’ve been living in the area for a while, you might know certain risks that apply to your location, like earthquakes or wildfires. Whether you’re new to the area or have been living in the same town your entire life, working with a local insurance company can help you get a clearer understanding of location-based risk coverage.
How do I choose a deductible?
Choosing a higher deductible can help you lower costs on monthly premiums, but it’s important to consider how your current budget affects your ability to pay the deductible. Any insurance deductible should never be so high that you can’t pay it in the event of an emergency.
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To learn more about how homeowners insurance can protect your business, get in touch with the independent agents at LoPriore today. Our experienced insurance agents are available 24/7 to answer your questions, provide information about our home insurance policies, or provide you with an instant quote.