Roughly 6 percent of homeowners experience an insurance claim every year.
Though that number might seem small, it’s important to mitigate your risk if something happens to your home. Not having the right policy could cost you thousands of dollars in losses.
Buying homeowners insurance is an essential step to purchasing a new home. But finding the right insurance policy can be both confusing and stressful. You need to know the best options for you based on your area, home, and mortgage.
Here are the essential insurance tips for first-time home buyers. Read on to learn more about finding the right coverage for you.
1. Talk With Local Insurance Agents
You don’t have to be an expert on homeowners’ insurance to find the right coverage. You do need to rely on the expertise of others.
Local insurance agents use their knowledge of the market to help you find a quote that fits your needs and budget. As experts in the field, they determine your needs before searching for quotes.
Independent agents give you several different quotes at once to make sure you get the best value on your insurance. There are also one-stop-shop real estate services that will provide insurance, financing, and loan services during the home buying process.
Agents compare insurance plans and work with you to make sure that your budgetary and coverage needs are met.
2. Make Sure You Get Adequate Coverage
When buying homeowners insurance, it’s important to keep in mind your coverage needs. Do you live in an area with natural disasters? What about snowstorms? How old is your home?
Once you have asked these questions, pick a plan that is tailor-made to your needs. There are a few main types of homeowners’ insurance, each with different levels of coverage.
An HO-1 policy is the most basic form of coverage. It covers normal household dangers, such as fire, theft, vandalism, and storm damage. An HO-2 policy covers the same policy and additional dangers, such as water, frost, snow, electrical currents, and destruction of household systems.
HO-3 is a common policy that covers a range of risks in addition to those covered by HO-2. These typically include home attachments, belongings, and personal liability in the event of an accident. HO-3 coverage can vary depending on the insurer.
Talk with your insurance agent to learn more about different coverage options.
3. Review Your Policy’s Details
The average cost of an annual premium for homeowners insurance is between $300 and $1000. Price may be important, but there are many other factors to consider before signing the dotted line on your policy.
Review your policy’s information in detail to know what is covered. Also, it’s important to understand the terminology of your policy.
Deductible refers to your out-of-pocket expenses in a claim. Premium is your monthly (or annual) expense for coverage. Actual cash value gives you a depreciated cash value for your property.
Additionally, you have the option to look for key coverage areas, such as liability and personal property in your plan.
Buying Homeowners Insurance
Don’t put your new home at risk. Find the right coverage by consulting with experts, understanding coverage options, and reviewing your policy’s details.
Are you looking to purchase homeowners insurance? We can help. Contact us today to speak with our team of experts.
Anthony Piccone is President of 7th Level Mortgage, LLC. A recipient of the South Jersey Entrepreneur of the Year award, he has more than 28 years experience in the financial services industry, and founded 7th Level Mortgage LLC in 2012. He first entered the financial market in the residential loan industry in 1995, with National Future Mortgage. Since then, he has become certified in Life Accident and Health Insurance.