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What should you know about purchasing home insurance

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Buying a home can be so overwhelming that it’s easy for first-time buyers, in particular, to put a little thought into the home insurance process. Yet, if something happens to your home, home insurance can make or break you. Before you just sign on the dotted line, here are four tips to guide you:

You also recommend you to read this 10 home insurance need-to-knows

1- You Need Home Insurance

Homeowners should purchase home insurance to protect their home and personal property. Renters need insurance to protect their furniture and other personal property. Everyone needs to be protected against liability in the event of accidents that injure others or damage their property.

2- Decide How Much Coverage You Need

The better your coverage, the less you will have to pay out of pocket in the event of a claim. In some cases, your lender decides how much coverage you need and may require you to purchase a policy that covers at least the mortgage amount. It is important to note that the amount of coverage you purchase for your home, contents and personal property affects the price you pay.

3- Ask Your Agent About Discounts

In some states, insurers offer lower prices for things like insuring your home and car with the same company, installing deadbolts or alarm systems, or replacing the roof.

4- Shop Around Before You Buy

Check the newspaper and telephone directory yellow pages for businesses and agents in your area. Also, ask your neighbors, relatives and friends for recommendations on insurance companies and agents. Remember to shop around for the best price and service.

5- Where to Shop

Check the newspaper and telephone directory yellow pages for businesses and agents in your area. Also, ask your neighbors, relatives and friends for recommendations on insurance companies and agents. Remember to shop around for the best price and service.

6- Replacement Cost or Actual Cash Value?

You have the option of choosing to insure your home and belongings at either replacement cost or actual cash value. Replacement cost is the amount it would take to replace or rebuild your home or repair the damage with materials of the same kind and quality, without deduction for depreciation. It is important to insure your home for at least 80% of its new value. Actual cash value is the amount it would take to repair or replace damage to your home after depreciation.

7- Read Your Policy Carefully

Know that a home insurance policy is a legal contract. It is written in such a way that your rights and responsibilities and those of the insurance company are clearly stated. When purchasing home insurance, you will receive a policy. You should read this policy and ensure that you understand its contents. Keep your policy in a safe place and know the name of your insurer.

8- Compare Deductibles

The deductible is the amount you must pay out of pocket for each claim and only applies to cover for your home and personal property. When choosing a policy, make sure you are comfortable paying the deductible if you make a claim. Remember that a policy with a $100 deductible will cost more than a policy with a $250 deductible. Higher deductibles may be available at a reduced price.

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