Friday, September 10, 2010

Homeowners Insurance: What do you need to know?

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

When it comes to buying a home, most people work very hard to purchase the home and everything in it. It can take many years to build up a home from scratch. People should keep in mind that like anything else in your life, your property is at risk to dangers that are beyond your control. This could potentially wipe out everything you have spent years working hard for. These are primary reasons why one should have homeowners insurance.

Homeowners insurance coverage can offer a peace of mind, and will enable you to pick up the pieces and recoup financial losses in the event that your home or belongings are damaged and destroyed. When taking out homeowners insurance, it is very important to ensure that you are providing yourself with sufficient coverage. The first step to getting homeowners insurance is to find out what your home is actually worth. In addition to estimating the worth of your home, there are other factors to be aware of when purchasing a home.

Shopping around for good insurance prices and coverage plans is imperative. Many insurers have been raising rates to make up for losses they suffered during the financial crises. Also, insurers are competing for new customers meaning some of them are cutting better deals for new policy holders than for existing ones. This is why when shopping around, it is important that you find an insurer who is loyal to you.

Another issue that homeowners run into is having too much insurance coverage. It is very common for policies to contain inflation –protection provisions that automatically increase your coverage amount. Usually that would be a good thing, but now that construction costs have fallen, not so much.

Homeowners should also be aware of their reputation when seeking homeowners insurance. The same way lenders check your credit score to find out what amount to charge you, insurers look to see what claims you have filed in the past. At times, insurance records can be full of errors. Checking your insurance records before you seek coverage is necessary.

When selecting a deductible, you should go with the highest deductible you can afford and use your savings to cover the cost of minor repairs. Filing a claim for every broken window or minor damage can increase your premiums by 10% to 15%. Increasing your deductible from $500 to $1000 can lower your annual premium as much as 25% according to the Insurance Information Institute.

One of the most important factors when it comes to homeowners insurance is the history of the house. Though it seems unfair, claims associated with the property before you buy it can result in you paying more than you usually would. You can get information on past claims by asking for a copy of the seller’s CLUE disclosure report. Although you may be able to negotiate with the seller, you are stuck with the history of the house you buy.

8 comments:

  1. Useful post. The things that you have included in your post about home owner insurance policy is very helpful. I do have found some unique and interesting facts that will help one to make out a good home insurance deal. Thank you.

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  2. Thank you for your post! As a first time homeowner I have felt more than a little overwhelmed by purchasing homeowners insurance and have been looking all over for homeowners insurance quote but haven't had the slightest clue what I was looking at. I appreciate the great information.

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  3. Hi,
    Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it. Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people.

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  4. Thank you, this is very helpful! I need to get home insurance in Calgary and I really appreciate these tips. This is my first time owning a home so I don't really know what I am doing and I am afraid of messing things up for myself.

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  5. Insurance should be at the very top of the list.

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  6. Great post! I appreciate your insights. I hope that I can incorporate them into getting my home insurance in calgary. Keep up the awesome work!

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  7. Nice Posting. Thanks for sharing this post. This post is really useful and informative.

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