Top Homeowners’ Insurance Advice From Real Estate Experts

Purchasing a home can be a difficult process so the last thing you are probably considering is homeowner’s insurance.

However, to borrow from a lender in order to purchase a home you need to have proof of insurance.

If you have never bought homeowners’ insurance before, it can be a bit tricky to understand the variety of policies, rates, and options available.

Here is a bit of advice from top real estate experts to assist you in purchasing homeowners’ insurance. 

Look for cost breaks

Homeowners who maintain a security system and who use the same insurance company for a multiple policy discount can save quite a bit of money on their insurance payments. In addition, when you switch insurance companies you can get a new customer discount or if you are a first-time homebuyer you will receive a discount. 

Some items are not covered

You might think that your insurance should cover everything, but unfortunately that is not the case. You will need to include a rider if you want coverage for events such as flood, earthquake, sewer and drain backup, and even identity theft losses.  

Multiple factors affect rates

Your insurance rates aren’t based on just your coverage options. The neighborhood where you live, your history of past claims, the crime rate of the area you live in, the condition of your home, and even your history of past claims. 

All insurance is not created equal

There are different levels of homeowners insurance for you to choose from. 

• Actual cash value: cover the cost of the house plus the value of your belongings after consideration for depreciation. 
• Replacement cost: Covers the actual cash value of your home and possessions without the consideration for depreciation. 
• Modified replacement cost value: Covers older homes and does not factor in depreciation when calculating reimbursement. 
• Guaranteed (or extended) replacement cost/value: Most comprehensive plan that pays for whatever it costs to repair or rebuild your home. Even if the cost is more than your policy limit, the insurer will offer extended replacement.  

Shop around

Just like the process of buying a home, the process of buying insurance should take time. Research insurance providers, get multiple quotes, ask family and friends for recommendations, and speak to several insurers before agreeing to a policy. 

Know your worth

To determine the coverage you need, you should know the cost to rebuild your home. Include any additional structures on your property such as a garage, pool, or fence in your calculations. Factor in the replacement cost of your belongings by researching the cost you would pay today to replace items such as appliances. 

Document everything

In order to ensure that your insurance fully covers the cost of your belongings, you should document everything that would be included under the replacement policy. Film or photograph each room of your home as well as high priced items such as art and jewelry. Store your inventory online as well as remotely and periodically update your inventory. 

Remember to take your time researching insurance companies before deciding on the right one for you. Discuss your options with your real estate agent, who can give you the best advice on what type and how much insurance you need.