You've worked hard to buy your first home. Be sure to choose a policy that will protect your investment.
There’s so much to consider that many first-time buyers don’t think about home insurance — which will be important when it comes to closing on the house.
Factor the ongoing cost of home insurance into your home-buying budget, because it will probably show up in your monthly mortgage payment along with payments on your loan principal and interest and your property taxes. That means you should go into your search knowing the basics about insuring your house and what can drive up the cost of coverage.
Once you choose the house and negotiate an offer, it will be time to find an insurer. There are a few issues to take into consideration before settling on a provider — all policies are not created equal. Using these tips can help you save money and ensure that you have quality coverage to protect your largest investment.
Shop around
The price of home insurance varies widely from carrier to carrier. That’s because each provider has a different algorithm for determining customer premiums. This is one reason why it’s a good idea to comparison shop through an insurance agent. You could end up saving yourself hundreds of dollars simply by getting a few different quotes.
Don’t skimp on coverage
While you want to save money on home insurance, it’s important not to skimp on coverage. Standard home insurance policies typically offer protection from a variety of potential risks, ranging from liability to damage from weather-related perils. However, you may want to adjust or add coverage depending on your needs.
One matter you should pay close attention to is your amount of dwelling coverage — the part of your policy that protects the structure of your home. You should have enough dwelling coverage to rebuild completely in case the house is destroyed by a covered peril. That amount, however, is often different from the purchase price. Your insurance agent will be able to provide you with the estimated amount of dwelling coverage that’s right for you that is calculated with a specific replacement cost evaluator.
Bundle your policies
Buying home and auto insurance from the same provider – most sell both – can save you as much as 20% on your annual premium. Do you have multiple vehicles? Or even a boat? You can often bundle all of these items with one carrier.
Evaluate risks as you look
When you’re evaluating potential homes, consider the risk each proposes. Is the house in a high-risk flood plain? Standard home insurance doesn’t cover flooding. For this protection, homeowners must purchase a separate policy from the National Flood Insurance Program. Just a few inches of flood water can cause tens of thousands of dollars in damage.
Does one of the homes you’re considering have a swimming pool or trampoline on the property? Either factor can increase the amount you’ll pay for home insurance.
Remember, even veteran home buyers can get tripped up by the process. But take your time, ask plenty of questions and be sure to use an insurance agent.
For more information on home insurance, contact Lallis & Higgins Insurance.
Zillow.com
