The process of home buying is one of the most important affairs that one can ever have in a lifetime. This is due, in large part, to the cost of the house and that often means a significant amount of one’s life savings are on the line. Anyone in their right mind would want their purchase to go smoothly. This is no less than a life investment after all. And like any major investment, you’re going to want to make sure that it’s insured.
To the uninitiated, the process of home buying can be an intimidating experience. Home insurance selection, even more so. So, how does one find a blade with which to cut through the noise of one’s doubt and confusion? Well, through information, of course. And that’s exactly what you’re going to get from this article.
These are the fundamental steps that you need to take in order for you to successfully apply for a home insurance plan.
Assess Values and House History
The first step is often where newbies make a misstep. No, that misstep doesn’t start with asking “Where can I find house insurance near me?”. That’s the easy part. The misstep happens when you insure your home for the amount that you paid for it, rather than its actual value. This means that you should take into consideration the actual cost of rebuilding the home, not how much you paid for it. This is because your home is going to cost more to rebuild later on due to inflation.
This also means that you should ask the seller to provide a home insurance claim report. This report is going to help you determine not only whether or not the house was involved in any previous fires and floods, it’s also going to help you detect potential problems with the house based on what it’s been through.
Clarify What’s Covered
Coverages have different limits in different policies. However, a homeowner’s insurance policy will often cover your house’s structure and your personal effects. Legal coverages are also included which provide protection from any legal liability for injury of damage to property of anyone on your property.
There are also special circumstances included in what’s covered by your insurance policy. Fire, lightning strikes, and wind damage are typically covered. Damage and loss resulting from theft and vandalism are also covered to different levels.
This information becomes relevant when you take the general location of your house into consideration. For example: why would you pay for flood insurance when your house is located on a hill anyway? Or why would you pay for earthquake insurance when the area isn’t earthquake-prone to begin with?
Deductibility
Once you’ve settled all other aspects of your homeowner’s insurance plan, you need to review it in order to cut down costs as much as you can. Things like raising your deductible, installing security measures, and even having your home insured by the same company that ensures your car can help you reduce the premium you need to pay.
