Homeowners Insurance, Things to consider…

Homeowners Insurance is a big decision and different insurance companies can vary in coverage and pricing greatly.  For that very reason, choosing an insurance company for Homeowner’s Insurance can be overwhelming.  Here are some tips for you and items to consider.

  1. Contact multiple companies to compare pricing and coverages.  Most of the time your mortgage company will require you to obtain Homeowner’s Insurance.  Depending on where you live, if you are close to a body of water or in a flood plain, you may be required to have flood insurance as well. You will want to get the right amount of coverage for the best price.  Think more towards value on the dollar for coverage VS the just the cheapest.  Also, checking out Customer Reviews on their experiences during times of damage claims and disaster.  Seeing how the insurance company handled them would be great information to seriously consider.   Sometimes you get a little more when you pay a little more, however, do not overpay.
  2. Escrow your insurance in your mortgage VS paying once or twice a year. This will insure ease of payment to your escrow, keep you current and up to date as long as you are paying your mortgage payment on time and in full.  Also having it split over 12 months’ time makes it financially easier to pay.  Your lender then pays your insurance for you and usually your taxes too.  Lenders do appreciate you escrowing as well as they know their investment is being protected and the comfort of knowing the insurance is getting paid.  At closing, you will want to have your Insurance Policy information and One Year’s premium can be paid or rolled into your loan.
  3. Adequate coverage is crucial. Avoid paying for more than you need and make sure your level of coverage is applicable to your investment and its contents.
    1. Broad Policy 16 Perils
    2. Broader Policy ALL Perils
    3. Premium Policy
    4. Co-ops/Condos
    5. Mobile Home
    6. Older Homes
  4. Details, Details, Details
    1. Actual Cash Value
    2. Replacement Cost
    3. Premium
    4. Personal Property (guns, rings, furniture, electronics, etc.)
    5. Liability (if someone is hurt on your property)
    6. Deductible
    7. Riders
    8. Sub-limits (a limit within the limit on a section of your policy)

Look up the above listed terms and make sure you have a good understanding of how they work and how they affect your policy coverage and price.   Getting yourself educated on these basics can save you headache and money.

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