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8 Steps To Buying And Insuring Your New Home

Posted On Thursday, 14 July 2022 18:32
8 Steps To Buying And Insuring Your New Home

Buying a new home and insuring it go hand in hand. Not only do you want to purchase the best new residence to call home, but you want to make sure that residence is protected from theft, flood damage, and other unpredictable factors. 

As an independent insurance company, G&G Independent Insurance recommends you follow these 8 steps to buying and insuring your new home.

  1. 1. Build Up Your Credit Score

A bad credit score is not great for buying a home or home insurance. At best, it will limit how much of a mortgage you qualify for as well as how low your premium can go. At worst, you may be denied both a mortgage and insurance coverage. 

Take the months and years leading up to purchasing a new home to build up your credit. According to Rocket Mortgage, you need at least a 620 to qualify for a home loan.

  1. 2. Don’t Make Any Expensive Purchases Or Withdrawals

Making an expensive purchase or withdrawal from your bank account right before you intend on buying a home is a bad idea. They could impact your credit score as well as how a lender views your credibility. They may see your large transaction and suspect you’re getting undisclosed loans.

All of this can slow down the process of getting approved for a mortgage and prevent you from purchasing a house.

  1. 3. Make Sure You Get Full Insurance Coverage

When you find a house you want and are ready to buy a home insurance policy, make sure you get full coverage.

There are three main types of home insurance you’ll want to have. These will cover you in just about any eventuality.

  1. 1. Buildings Insurance

With buildings insurance, your home will be covered in case it ever needs to be repaired or rebuilt.

  1. 2. Contents Insurance

Contents insurance covers the contents of your home (meaning your possessions) in case they become damaged or stolen.

  1. 3. Specified Items Insurance

This type of insurance only covers the items that you specify. These could include your most valuable possessions, such as expensive jewelry or electronics.

  1. 4. Check If You Qualify For Discounts

Discounts will help you cut the cost of your premiums down, so make sure you ask your insurance company about them. A common one is a multi-policy discount, where you have multiple types of coverage - home, auto, life - with the same company. 

  1. 5. Don’t Forget Coverage For Theft

It’s extremely important for you to protect your home and possessions against theft. 

Your basic buildings, contents, and specified items policies will cover most of your assets in the event of a burglary. However, you may also want to add a policy called Other Structure. 

Other structure insurance protects other buildings on your property, such as sheds and garages. Many people store valuable items in these buildings and should protect them accordingly. 

  1. 6. Ask How The Insurance Company Calculates Replacement Cost On Your Policy

An important question you should always ask your insurance company is which value cost calculation method your policy includes.

In the event that any of your possessions are damaged or stolen, your insurance company will calculate their value cost in one of two ways.

  1. 1. Actual Cost Value (ACV)

If your insurance policy includes actual cost value (ACV), your insurance company will only pay out the actual cost value of your damaged or stolen possessions. 

Here’s how this works. Let’s say, for example, you bought a flat screen tv for $1000 three years ago, but now it’s only worth $300. If it gets damaged in a fire in your home, your insurance company will only pay out $300. That’s because that amount is the tv’s actual cost value today. 

  1. 2. Replacement Cost Value

Replacement cost value is more expensive, but it’s worth it because your insurance company will pay out the replacement cost value of your possession. Returning to our previous example, instead of only getting $300 - the actual cost value of your tv - you will receive the amount of money you need to replace it: $1000.

Find out before you buy an insurance policy which method of value calculation the company uses.

  1. 7. Don’t Automatically Get The Cheapest Premium

It’s tempting to go for the cheapest premium, especially when you add an expensive mortgage payment on top of your home insurance payment. 

But, as the old saying goes, you get what you pay for. Cheap premiums usually means that you don’t get all the benefits you need to cover your house and your possessions, as well as the rest of your property (sheds, garages, etc.). 

This doesn’t mean you have to find the most expensive premium on the market. But it does mean you should always investigate insurance companies and policies thoroughly to ensure you’re getting the sweet end of the deal.

  1. 8. Shop Around For Home Insurance

The most important step on your journey to buying a home and home insurance is to shop around. That’s why you should shop around for home insurance through an independent insurance company.

G&G Independent Insurance helps you choose the right homeowners policy by comparing rates from dozens of insurance companies. This way, you can handpick the best deal for your budget.
To get a free insurance quote, call today or click here.

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