Having an insurance policy for your home is one way you can safeguard money invested in building the home in case of any mishap. The building of that beautiful home is not enough, it requires further efforts that may include getting insurance in place and this will require more paperwork.
The process involved might seem to be endless but it is definitely going to be worth your time, efforts, and good value for money in the end. You can use a moving calculator to have an idea of what it will cost you to move into your new home and get it insured. We will take a look at how to get insurance for your home in the sections to follow but first, let us take a look at what insuring your home entails and what homeowner insurance companies do.
What does homeowner’s insurance do?
An insurance policy is meant to protect your home against all types of accidents such as fire outbreaks, and natural disasters among others. Home insurance companies are meant to provide insurance coverage for both your home and personal property in the event of theft, damage, theft, and injuries sustained by anyone in the process. Your home insurance can also cover your personal property if your property is stolen when you are not at home. However, limited coverage may be available for jewelry, gold, and money and valuable gadgets such as laptops and electronica may attract additional insurance policies.
Buying your first home insurance policy
The task of taking a decision on buying your first home can be very interesting and also exciting at the same time; this is because your decision will be centered around other major life decisions such as how close the location of the house is to your workplace, getting married, and when you have to start having kids. It makes a whole lot of economic sense to own your house than paying rent, this will help you save more in the long term.
The basic principle that should guide you in buying an insurance policy for your new home should be to get the best insurance policy that will protect your investment and personal belongings while you are also able to save money at the same time.
How much your first home insurance can cost?
Insurance costs for your home can be as much as $952 in a year according to Value Penguin and it can be as high as $2,000 in some more expensive states. The insurance rate usually includes average home insurance rates, which will capture discounts for the general population like claims-free discounts, age discounts, and in some cases, it can include loyalty discounts.
These discounts may not apply to those who are first-time home buyers. Hence, it is important that you consider the options available to you as a first-time home insurance buyer before you make a final decision in order to get the best rate available. Saving money on your insurance cost will save you money that can be invested into your home improvements and mortgage.
In order to get the best insurance rate, consider talking to a local insurance professional for expert directions before you buy a home so that they can inform you of potential problems that may lead to high insurance costs. Insurance professionals who specialize in house insurance have access to their share of claims and insurance company ratings in different areas.
Factors that can make your home insurance more expensive
- If you don’t take advantage of bundling your car and home insurance, you will end up paying more for home insurance compared to someone who puts all their insurance with one company. To get the best rate, you will need to evaluate the total cost of the two policies with the same insurer. It is possible that the cost of your car insurance might be more expensive with your home insurer, while the discount you will get on your home insurance can make the total cost of your insurance less. Hence, it is more economical to evaluate your insurance as a whole package than doing it one on one. You have to be strategic and use all your insurance to negotiate in order to get an affordable insurance rate.
- You will not be eligible for the claims free discount if you make claims under a previous insurance policy such as a renters policy, this can make you pay more on your home insurance.
- You will pay more for your insurance if you have a gap in your insurance history if you have never had previous insurance on your residence.
- If your home is built with special features and special materials or if it is built in an area with a high risk of tornadoes, flood, and wind damage.
- You also pay more on insurance if you have previously been canceled by insurance due to non-payment.
Ways to get insurance for your home
You will need at least basic insurance in order to protect your home from theft, flood, and damage. To get an insurance policy for your home, make sure you contact an insurance professional and also compare rates from different insurance companies around to get the best rate.
There are several options available to you when you wish to get a home insurance policy, start with an inspection to your home by your prospective insurance company. The inspection will enable your insurance company to know the worth of your home and this will determine your premium.
Before you get home insurance quotes, try as much as possible to answer the following questions;
- Do you need actual or replacement cost value for your contents insurance?
- What is your deductible? The higher your deductible, the lesser your premium. However, it is important that you are able to afford the deductible in case you have to file a claim.
- Is there a need for an insurance endorsement for expensive items?
- Do you require umbrella insurance?
- Do you need to bundle your policies and what other discounts can you get?
- Do you need to get flood insurance?
- What is the claims history for your new house?
Once you can provide an accurate and honest answer to these questions, then you are ready to go shopping for an insurance policy for your home. Avoid just starting with your family insurer or car insurance company make sure you get quotes from at least three other insurance companies. You can make use of their online moving calculator to have an idea of what your home insurance will cost.
Compare the quotes and review the insurance companies to ensure that they are reliable and can deliver on their promises. Go through their customer service ratings to ensure you are sure of their past performances and what they can deliver.
Go with only trusted insurers
The fact that an insurance company gives you the best rates doesn’t mean that they will be the best company to insure your home. You have to consider other factors; such as their antecedents, and experience. Make sure you can trust them and they have good customer relations and also offer high customer satisfaction.
Know what your policy doesn’t cover
It is important that you understand what your insurance policy covers and what it does not cover. Knowing your insurance policy will enable you to make a claim. You surely don’t want to file a claim for what it is not covered in your claim as this will go into your claims record. Hence, in that case, you will not get reimbursement and this can lead to higher rates as a result of your claim.
For example, if you live close to an ocean and your insurance company doesn’t provide windstorm insurance, you will need to buy additional windstorm insurance from another insurer. This type of insurance will have a separate deductible, in addition to your home insurance.
Usually, homeowners insurance covers dwelling coverage, personal property coverage (furniture, electronics, appliances, and clothing), liability coverage, and additional living expenses among others. You can also buy insurance for your home replacement cost.
Get a Comprehensive Loss Underwriting Exchange (CLUE) report
Your insurance company bases your rates on your claims history even before you lived there. The CLUE report will enable you to see the claims that homeowners filed. If your home has multiple claims within a short period of time, you might have to pay higher insurance rates. If it so much, some insurance companies might even decline to offer insurance coverage for your home.
Make sure you look beyond just the rate an insurance company offers when you are looking to get an insurance policy for your home. Quality of services from the insurance company, years of experience in the business, and customer satisfaction should be top of your requirements expected from the insurance company you wish to patronize.