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What Every Buyer Should Know about Home Insurance

Written by Posted On Tuesday, 30 July 2019 20:53

Home insurance is something everyone needs, even if they don't own a house. Why? Because even renters’ own property, in the form of furniture, artworks, appliances, clothing, jewelry and more. Oddly, financial counselors note that the topic of "home insurance" is not as well understood as it should be by homeowners and renters. What are some of the key facts that the experts say we should all be aware of? Here are five areas that consumer advisors say should be at the top of the list:

You Lender Requires Insurance

Besides the question of "need," there is the concept of "must." If you don't own your home outright, free of a mortgage, then your lender will require you to have at least as much home insurance as the amount of the outstanding amount owed on the home. If you don't purchase the insurance, the lender will do so, and that can mean a much higher-priced policy than you need. Lenders don't comparison shop, so won't be looking out for your best interest when buying home insurance. Avoid this mess by purchasing a policy yourself.

Know How Much and What Types of Insurance You Need

Most people know the minimum amount of home insurance they need but few realize where the upper limits are, based on needs and wants . Of course, you'll have to get a policy to cover the lender's requirements, but it's typical to get more insurance than that. If you live in an area where tornadoes, floods or hurricanes are common, speak with your agent about add-ons that make sense. Negotiate with the insurer about deductibles, total coverage amounts, special riders and other unique policy aspects that pertain to your particular situation. Getting the right amount of insurance is the key concept that many homeowners miss. In perhaps more than 80 percent of all situations, based on industry data, homeowners don't have enough insurance, and about half of all homeowners don't have the right kinds of insurance based on their geographic risk factors.

Ask about Discounts

In some ways, home insurance is like car insurance. You need to ask the agent about specific discounts that apply to your situation. Are you retired? Are you a member of law enforcement or a first-response professional? Are you a teacher? Are you a member of the military or a member of the clergy? All these factors can mean significant discounts on home insurance, but in many cases, you won't hear about them unless you are pro-active and speak with your agent about what's available.

Policies Can be Cancelled

Home insurance policies can be cancelled by the provider , so that's a cold, hard fact that many homeowners find out at the worst possible time. If you lose your job, experience a credit score decline, are convicted of a crime or change jobs, it's possible to have a policy cancelled with short notice. In that case, especially if you still have a mortgage, you'll be in "hurry up and hurry up" mode to find a new home insurance policy, and the prices might be higher than you expect. Always ask your insurance agent, before purchasing a policy, what might cause a policy to be cancelled.

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James Stevenson

Hi, My name is James and I've been involved in the property and real estate industry for 10 years now. I hope people will like to read about my thoughts and experiences in the industry and please contact me if you want to discuss my articles further!

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